Correlation Between Harsco and Molson Coors

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

By analyzing existing cross correlation between Harsco 575 percent and Molson Coors Brewing, you can compare the effects of market volatilities on Harsco and Molson Coors 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 Harsco with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harsco and Molson Coors.

Diversification Opportunities for Harsco and Molson Coors

-0.27

Correlation Coefficient

Harsco  Molson Coors

Very good diversification

The 3 months correlation between Harsco and Molson is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Harsco 575 percent and Molson Coors Brewing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molson Coors Brewing and Harsco 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 Harsco 575 percent are associated (or correlated) with Molson Coors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molson Coors Brewing has no effect on the direction of Harsco i.e., Harsco and Molson Coors go up and down completely randomly.

Pair Corralation between Harsco and Molson Coors

Assuming the 90 days trading horizon Harsco 575 percent is expected to under-perform the Molson Coors. But the bond apears to be less risky and, when comparing its historical volatility, Harsco 575 percent is 1.01 times less risky than Molson Coors. The bond trades about -0.17 of its potential returns per unit of risk. The Molson Coors Brewing is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  5,494  in Molson Coors Brewing on September 26, 2024 and sell it today you would earn a total of  363.00  from holding Molson Coors Brewing or generate 6.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

Harsco 575 percent  vs.  Molson Coors Brewing

Harsco 575 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harsco 575 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for Harsco 575 percent investors.

Molson Coors Brewing

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Molson Coors Brewing are ranked lower than 6 (%) 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.

Pair Trading with Harsco and Molson Coors

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

The idea behind Harsco 575 percent and Molson Coors Brewing 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.