Correlation Between Cummins and Molson Coors
Can any of the company-specific risk be diversified away by investing in both Cummins 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 Cummins and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cummins and Molson Coors Brewing, you can compare the effects of market volatilities on Cummins 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 Cummins with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cummins and Molson Coors.
Diversification Opportunities for Cummins and Molson Coors
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cummins and Molson is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Cummins 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 Cummins 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 Cummins 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 Cummins i.e., Cummins and Molson Coors go up and down completely randomly.
Pair Corralation between Cummins and Molson Coors
Considering the 90-day investment horizon Cummins is expected to generate 1.1 times more return on investment than Molson Coors. However, Cummins is 1.1 times more volatile than Molson Coors Brewing. It trades about 0.14 of its potential returns per unit of risk. Molson Coors Brewing is currently generating about -0.1 per unit of risk. If you would invest 39,434 in Cummins on August 20, 2025 and sell it today you would earn a total of 6,164 from holding Cummins or generate 15.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cummins vs. Molson Coors Brewing
Performance |
| Timeline |
| Cummins |
| Molson Coors Brewing |
Cummins and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cummins and Molson Coors
The main advantage of trading using opposite Cummins and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cummins 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.| Cummins vs. Illinois Tool Works | Cummins vs. Canadian National Railway | Cummins vs. Roper Technologies, | Cummins vs. FedEx |
| Molson Coors vs. Pilgrims Pride Corp | Molson Coors vs. Smithfield Foods, Common | Molson Coors vs. Campbells Co | Molson Coors vs. ConAgra Foods |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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