Correlation Between Molson Coors and Vestis

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

Diversification Opportunities for Molson Coors and Vestis

0.06

Correlation Coefficient

Molson Coors  Vestis

Significant diversification

The 3 months correlation between Molson and Vestis is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Brewing and Vestis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestis 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 Vestis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestis has no effect on the direction of Molson Coors i.e., Molson Coors and Vestis go up and down completely randomly.

Pair Corralation between Molson Coors and Vestis

Considering the 90-day investment horizon Molson Coors is expected to generate 2.01 times less return on investment than Vestis. But when comparing it to its historical volatility, Molson Coors Brewing is 2.3 times less risky than Vestis. It trades about 0.11 of its potential returns per unit of risk. Vestis is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,395  in Vestis on September 3, 2024 and sell it today you would earn a total of  237.00  from holding Vestis or generate 16.99% return on investment over 90 days.

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

Molson Coors Brewing  vs.  Vestis

Molson Coors Brewing

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Molson Coors Brewing are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Molson Coors may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Vestis

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vestis are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Vestis unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Molson Coors and Vestis

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

The idea behind Molson Coors Brewing and Vestis 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.