Correlation Between Simon Property and Boston Beer
Can any of the company-specific risk be diversified away by investing in both Simon Property and Boston Beer 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 Boston Beer 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 Boston Beer, you can compare the effects of market volatilities on Simon Property and Boston Beer 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 Boston Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Boston Beer.
Diversification Opportunities for Simon Property and Boston Beer
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Simon and Boston is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer 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 Boston Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Beer has no effect on the direction of Simon Property i.e., Simon Property and Boston Beer go up and down completely randomly.
Pair Corralation between Simon Property and Boston Beer
Considering the 90-day investment horizon Simon Property Group is expected to under-perform the Boston Beer. But the stock apears to be less risky and, when comparing its historical volatility, Simon Property Group is 1.42 times less risky than Boston Beer. The stock trades about -0.03 of its potential returns per unit of risk. The Boston Beer is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 31,327 in Boston Beer on September 12, 2024 and sell it today you would earn a total of 569.00 from holding Boston Beer or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. Boston Beer
Performance |
| Timeline |
| Simon Property Group |
| Boston Beer |
Simon Property and Boston Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Boston Beer
The main advantage of trading using opposite Simon Property and Boston Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Boston Beer 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 Boston Beer will offset losses from the drop in Boston Beer'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 |
| Boston Beer vs. Anheuser Busch Inbev | Boston Beer vs. Molson Coors Beverage | Boston Beer vs. Heineken NV | Boston Beer vs. Ambev SA ADR |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |