Correlation Between Molson Coors and Transgene

Can any of the company-specific risk be diversified away by investing in both Molson Coors and Transgene at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Molson Coors and Transgene into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Molson Coors Brewing and Transgene SA, you can compare the effects of market volatilities on Molson Coors and Transgene and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Molson Coors with a short position of Transgene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Transgene.

Diversification Opportunities for Molson Coors and Transgene

0.0

Correlation Coefficient

Molson Coors  Transgene

Pay attention - limited upside

The 3 months correlation between Molson and Transgene is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Brewing and Transgene SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transgene SA and Molson Coors is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Molson Coors Brewing are associated (or correlated) with Transgene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transgene SA has no effect on the direction of Molson Coors i.e., Molson Coors and Transgene go up and down completely randomly.

Pair Corralation between Molson Coors and Transgene

Considering the 90-day investment horizon Molson Coors is expected to generate 39.48 times less return on investment than Transgene. But when comparing it to its historical volatility, Molson Coors Brewing is 29.92 times less risky than Transgene. It trades about 0.03 of its potential returns per unit of risk. Transgene SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1.00  in Transgene SA on December 4, 2024 and sell it today you would earn a total of  158.00  from holding Transgene SA or generate 15800.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Molson Coors Brewing  vs.  Transgene SA

Molson Coors Brewing

Risk-Adjusted Performance

Weak

Over the last 90 days Molson Coors Brewing has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Molson Coors is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Transgene SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Transgene SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Transgene is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Molson Coors and Transgene

The main advantage of trading using opposite Molson Coors and Transgene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Transgene can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Transgene will offset losses from the drop in Transgene's long position.

The idea behind Molson Coors Brewing and Transgene SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.