Correlation Between Molson Coors and Mid America

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

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

Diversification Opportunities for Molson Coors and Mid America

0.53

Correlation Coefficient

Molson Coors  Mid America

Very weak diversification

The 3 months correlation between Molson and Mid is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Mid America Apartment Communit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid America Apartment 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 Beverage are associated (or correlated) with Mid America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid America Apartment has no effect on the direction of Molson Coors i.e., Molson Coors and Mid America go up and down completely randomly.

Pair Corralation between Molson Coors and Mid America

Assuming the 90 days trading horizon Molson Coors Beverage is expected to under-perform the Mid America. But the stock apears to be less risky and, when comparing its historical volatility, Molson Coors Beverage is 1.22 times less risky than Mid America. The stock trades about -0.17 of its potential returns per unit of risk. The Mid America Apartment Communities is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  22,396  in Mid America Apartment Communities on April 23, 2025 and sell it today you would lose (1,207) from holding Mid America Apartment Communities or give up 5.39% of portfolio value over 90 days.

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

Molson Coors Beverage  vs.  Mid America Apartment Communit

Molson Coors Beverage

Risk-Adjusted Performance

Very Weak

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

Mid America Apartment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mid America Apartment Communities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Mid America is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Molson Coors and Mid America

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

The idea behind Molson Coors Beverage and Mid America Apartment Communities 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.