Correlation Between Biglari Holdings and Simon Property
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings 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 Biglari Holdings and Simon Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Simon Property Group, you can compare the effects of market volatilities on Biglari Holdings 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 Biglari Holdings with a short position of Simon Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Simon Property.
Diversification Opportunities for Biglari Holdings and Simon Property
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Biglari and Simon is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings 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 Biglari Holdings 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 Biglari Holdings 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 Biglari Holdings i.e., Biglari Holdings and Simon Property go up and down completely randomly.
Pair Corralation between Biglari Holdings and Simon Property
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 1.79 times more return on investment than Simon Property. However, Biglari Holdings is 1.79 times more volatile than Simon Property Group. It trades about 0.07 of its potential returns per unit of risk. Simon Property Group is currently generating about 0.11 per unit of risk. If you would invest 15,467 in Biglari Holdings on August 28, 2024 and sell it today you would earn a total of 5,231 from holding Biglari Holdings or generate 33.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biglari Holdings vs. Simon Property Group
Performance |
| Timeline |
| Biglari Holdings |
| Simon Property Group |
Biglari Holdings and Simon Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Simon Property
The main advantage of trading using opposite Biglari Holdings and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings 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.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| Simon Property vs. Federal Realty Investment | Simon Property vs. Agree Realty | 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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