Correlation Between Duckhorn Portfolio and Molson Coors

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

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

Diversification Opportunities for Duckhorn Portfolio and Molson Coors

0.17

Correlation Coefficient

Duckhorn Portfolio  Molson Coors

Average diversification

The 3 months correlation between Duckhorn and Molson is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Duckhorn Portfolio 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 Duckhorn Portfolio 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 Duckhorn Portfolio 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 Duckhorn Portfolio i.e., Duckhorn Portfolio and Molson Coors go up and down completely randomly.

Pair Corralation between Duckhorn Portfolio and Molson Coors

Given the investment horizon of 90 days Duckhorn Portfolio is expected to under-perform the Molson Coors. In addition to that, Duckhorn Portfolio is 1.42 times more volatile than Molson Coors Brewing. It trades about -0.07 of its total potential returns per unit of risk. Molson Coors Brewing is currently generating about 0.02 per unit of volatility. If you would invest  5,367  in Molson Coors Brewing on February 4, 2024 and sell it today you would earn a total of  418.00  from holding Molson Coors Brewing or generate 7.79% return on investment over 90 days.

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

Duckhorn Portfolio  vs.  Molson Coors Brewing

Duckhorn Portfolio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duckhorn Portfolio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Molson Coors Brewing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Molson Coors Brewing has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Molson Coors is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Duckhorn Portfolio and Molson Coors

The main advantage of trading using opposite Duckhorn Portfolio and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duckhorn Portfolio 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 Duckhorn Portfolio 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.

Check out your portfolio center.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.