Correlation Between Molson Coors and Queens Road

Can any of the company-specific risk be diversified away by investing in both Molson Coors and Queens Road 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 Queens Road into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Molson Coors Canada and Queens Road Capital, you can compare the effects of market volatilities on Molson Coors and Queens Road 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 Queens Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Queens Road.

Diversification Opportunities for Molson Coors and Queens Road

0.16

Correlation Coefficient

Molson Coors  Queens Road

Average diversification

The 3 months correlation between Molson and Queens is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Canada and Queens Road Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Queens Road Capital 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 Canada are associated (or correlated) with Queens Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Queens Road Capital has no effect on the direction of Molson Coors i.e., Molson Coors and Queens Road go up and down completely randomly.

Pair Corralation between Molson Coors and Queens Road

Assuming the 90 days trading horizon Molson Coors Canada is expected to generate 0.96 times more return on investment than Queens Road. However, Molson Coors Canada is 1.04 times less risky than Queens Road. It trades about 0.03 of its potential returns per unit of risk. Queens Road Capital is currently generating about -0.08 per unit of risk. If you would invest  8,700  in Molson Coors Canada on December 4, 2024 and sell it today you would earn a total of  150.00  from holding Molson Coors Canada or generate 1.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	73.33%
Values	Daily Returns

Molson Coors Canada  vs.  Queens Road Capital

Molson Coors Canada

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Molson Coors Canada are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Molson Coors is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Queens Road Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Queens Road Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Molson Coors and Queens Road

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

The idea behind Molson Coors Canada and Queens Road Capital 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.