Correlation Between Ambev SA and Simon Property
Can any of the company-specific risk be diversified away by investing in both Ambev SA and Simon Property 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 Ambev SA and Simon Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambev SA ADR and Simon Property Group, you can compare the effects of market volatilities on Ambev SA and Simon Property 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 Ambev SA with a short position of Simon Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambev SA and Simon Property.
Diversification Opportunities for Ambev SA and Simon Property
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ambev and Simon is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ambev SA ADR and Simon Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simon Property Group and Ambev SA 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 Ambev SA ADR are associated (or correlated) with Simon Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simon Property Group has no effect on the direction of Ambev SA i.e., Ambev SA and Simon Property go up and down completely randomly.
Pair Corralation between Ambev SA and Simon Property
Given the investment horizon of 90 days Ambev SA ADR is expected to under-perform the Simon Property. In addition to that, Ambev SA is 1.14 times more volatile than Simon Property Group. It trades about -0.01 of its total potential returns per unit of risk. Simon Property Group is currently generating about 0.14 per unit of volatility. If you would invest 14,776 in Simon Property Group on September 1, 2024 and sell it today you would earn a total of 3,584 from holding Simon Property Group or generate 24.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ambev SA ADR vs. Simon Property Group
Performance |
| Timeline |
| Ambev SA ADR |
| Simon Property Group |
Ambev SA and Simon Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambev SA and Simon Property
The main advantage of trading using opposite Ambev SA and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambev SA position performs unexpectedly, Simon Property 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 Simon Property will offset losses from the drop in Simon Property's long position.| Ambev SA vs. Fomento Economico Mexicano | Ambev SA vs. Boston Beer | Ambev SA vs. Carlsberg AS | Ambev SA vs. Compania Cervecerias Unidas |
| Simon Property vs. Federal Realty Investment | Simon Property vs. National Retail Properties | Simon Property vs. Kimco Realty |
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 Stocks Directory module to find actively traded stocks across global markets.
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