Correlation Between Simon Property and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Simon Property and Coca Cola 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 Coca Cola 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 The Coca Cola, you can compare the effects of market volatilities on Simon Property and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Coca Cola.
Diversification Opportunities for Simon Property and Coca Cola
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Simon and Coca is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of Simon Property i.e., Simon Property and Coca Cola go up and down completely randomly.
Pair Corralation between Simon Property and Coca Cola
Considering the 90-day investment horizon Simon Property Group is expected to generate 1.66 times more return on investment than Coca Cola. However, Simon Property is 1.66 times more volatile than The Coca Cola. It trades about 0.11 of its potential returns per unit of risk. The Coca Cola is currently generating about 0.06 per unit of risk. If you would invest 13,337 in Simon Property Group on August 28, 2024 and sell it today you would earn a total of 4,674 from holding Simon Property Group or generate 35.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. The Coca Cola
Performance |
| Timeline |
| Simon Property Group |
| Coca Cola |
Simon Property and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Coca Cola
The main advantage of trading using opposite Simon Property and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.| Simon Property vs. Federal Realty Investment | Simon Property vs. Agree Realty | Simon Property vs. National Retail Properties | Simon Property vs. Kimco Realty |
| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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