Correlation Between Molson Coors and Shake Shack

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

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

Diversification Opportunities for Molson Coors and Shake Shack

-0.81

Correlation Coefficient

Molson Coors  Shake Shack

Pay attention - limited upside

The 3 months correlation between Molson and Shake is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Brewing and Shake Shack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shake Shack 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 Brewing are associated (or correlated) with Shake Shack. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shake Shack has no effect on the direction of Molson Coors i.e., Molson Coors and Shake Shack go up and down completely randomly.

Pair Corralation between Molson Coors and Shake Shack

Considering the 90-day investment horizon Molson Coors Brewing is expected to under-perform the Shake Shack. But the stock apears to be less risky and, when comparing its historical volatility, Molson Coors Brewing is 2.22 times less risky than Shake Shack. The stock trades about -0.18 of its potential returns per unit of risk. The Shake Shack is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  9,868  in Shake Shack on May 6, 2025 and sell it today you would earn a total of  1,316  from holding Shake Shack or generate 13.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Molson Coors Brewing  vs.  Shake Shack

Molson Coors Brewing

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in September 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Shake Shack

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Shake Shack are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Shake Shack disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Molson Coors and Shake Shack

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

The idea behind Molson Coors Brewing and Shake Shack 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..