Correlation Between Weyco and Molson Coors

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

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

Diversification Opportunities for Weyco and Molson Coors

0.62

Correlation Coefficient

Weyco  Molson Coors

Poor diversification

The 3 months correlation between Weyco and Molson is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group 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 Weyco 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 Weyco Group 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 Weyco i.e., Weyco and Molson Coors go up and down completely randomly.

Pair Corralation between Weyco and Molson Coors

Given the investment horizon of 90 days Weyco Group is expected to generate 1.54 times more return on investment than Molson Coors. However, Weyco is 1.54 times more volatile than Molson Coors Brewing. It trades about 0.07 of its potential returns per unit of risk. Molson Coors Brewing is currently generating about 0.03 per unit of risk. If you would invest  2,050  in Weyco Group on September 25, 2024 and sell it today you would earn a total of  1,753  from holding Weyco Group or generate 85.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Weyco Group  vs.  Molson Coors Brewing

Weyco Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Weyco Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Weyco unveiled solid returns over the last few months and may actually be approaching a breakup point.

Molson Coors Brewing

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Molson Coors Brewing are ranked lower than 7 (%) 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 Weyco and Molson Coors

The main advantage of trading using opposite Weyco and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyco 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 Weyco Group 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.