Correlation Between Molson Coors and Synex International

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

Diversification Opportunities for Molson Coors and Synex International

-0.76

Correlation Coefficient

Molson Coors  Synex International

Pay attention - limited upside

The 3 months correlation between Molson and Synex is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Canada and Synex International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synex International 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 Synex International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synex International has no effect on the direction of Molson Coors i.e., Molson Coors and Synex International go up and down completely randomly.

Pair Corralation between Molson Coors and Synex International

Assuming the 90 days trading horizon Molson Coors Canada is expected to generate 0.67 times more return on investment than Synex International. However, Molson Coors Canada is 1.48 times less risky than Synex International. It trades about 0.06 of its potential returns per unit of risk. Synex International is currently generating about -0.02 per unit of risk. If you would invest  6,465  in Molson Coors Canada on August 31, 2024 and sell it today you would earn a total of  2,235  from holding Molson Coors Canada or generate 34.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	70.65%
Values	Daily Returns

Molson Coors Canada  vs.  Synex International

Molson Coors Canada

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Molson Coors Canada are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Molson Coors unveiled solid returns over the last few months and may actually be approaching a breakup point.

Synex International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Synex International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Synex International is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Molson Coors and Synex International

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

The idea behind Molson Coors Canada and Synex International 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.