Correlation Between Molson Coors and UNITEDHEALTH

Can any of the company-specific risk be diversified away by investing in both Molson Coors and UNITEDHEALTH 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 UNITEDHEALTH 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 UNITEDHEALTH GROUP INC, you can compare the effects of market volatilities on Molson Coors and UNITEDHEALTH 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 UNITEDHEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and UNITEDHEALTH.

Diversification Opportunities for Molson Coors and UNITEDHEALTH

0.34

Correlation Coefficient

Molson Coors  UNITEDHEALTH

Weak diversification

The 3 months correlation between Molson and UNITEDHEALTH is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Brewing and UNITEDHEALTH GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITEDHEALTH GROUP INC 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 UNITEDHEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITEDHEALTH GROUP INC has no effect on the direction of Molson Coors i.e., Molson Coors and UNITEDHEALTH go up and down completely randomly.

Pair Corralation between Molson Coors and UNITEDHEALTH

Considering the 90-day investment horizon Molson Coors Brewing is expected to generate 5.56 times more return on investment than UNITEDHEALTH. However, Molson Coors is 5.56 times more volatile than UNITEDHEALTH GROUP INC. It trades about 0.0 of its potential returns per unit of risk. UNITEDHEALTH GROUP INC is currently generating about -0.1 per unit of risk. If you would invest  5,410  in Molson Coors Brewing on October 15, 2024 and sell it today you would lose (29.00) from holding Molson Coors Brewing or give up 0.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Molson Coors Brewing  vs.  UNITEDHEALTH GROUP INC

Molson Coors Brewing

Risk-Adjusted Performance

0 of 100

Very 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.

UNITEDHEALTH GROUP INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNITEDHEALTH GROUP INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, UNITEDHEALTH is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Molson Coors and UNITEDHEALTH

The main advantage of trading using opposite Molson Coors and UNITEDHEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, UNITEDHEALTH 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 UNITEDHEALTH will offset losses from the drop in UNITEDHEALTH's long position.

The idea behind Molson Coors Brewing and UNITEDHEALTH GROUP INC 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.