Correlation Between Simon Property and Compania Cervecerias
Can any of the company-specific risk be diversified away by investing in both Simon Property and Compania Cervecerias 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 Simon Property and Compania Cervecerias into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simon Property Group and Compania Cervecerias Unidas, you can compare the effects of market volatilities on Simon Property and Compania Cervecerias 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 Simon Property with a short position of Compania Cervecerias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Compania Cervecerias.
Diversification Opportunities for Simon Property and Compania Cervecerias
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Simon and Compania is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Compania Cervecerias Unidas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Cervecerias and Simon Property 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 Simon Property Group are associated (or correlated) with Compania Cervecerias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Cervecerias has no effect on the direction of Simon Property i.e., Simon Property and Compania Cervecerias go up and down completely randomly.
Pair Corralation between Simon Property and Compania Cervecerias
Considering the 90-day investment horizon Simon Property Group is expected to generate 0.81 times more return on investment than Compania Cervecerias. However, Simon Property Group is 1.23 times less risky than Compania Cervecerias. It trades about 0.13 of its potential returns per unit of risk. Compania Cervecerias Unidas is currently generating about 0.01 per unit of risk. If you would invest 11,508 in Simon Property Group on September 14, 2024 and sell it today you would earn a total of 6,350 from holding Simon Property Group or generate 55.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. Compania Cervecerias Unidas
Performance |
| Timeline |
| Simon Property Group |
| Compania Cervecerias |
Simon Property and Compania Cervecerias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Compania Cervecerias
The main advantage of trading using opposite Simon Property and Compania Cervecerias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Compania Cervecerias 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 Compania Cervecerias will offset losses from the drop in Compania Cervecerias' long position.| Simon Property vs. Site Centers Corp | Simon Property vs. CBL Associates Properties | Simon Property vs. Urban Edge Properties | Simon Property vs. Acadia Realty Trust |
| Compania Cervecerias vs. Boston Beer | Compania Cervecerias vs. Molson Coors Beverage | Compania Cervecerias vs. Ambev SA ADR | Compania Cervecerias vs. Molson Coors Brewing |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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