Correlation Between Compania Cervecerias and SIMON

Can any of the company-specific risk be diversified away by investing in both Compania Cervecerias and SIMON 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 Compania Cervecerias and SIMON into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Compania Cervecerias Unidas and SIMON PROPERTY GROUP, you can compare the effects of market volatilities on Compania Cervecerias and SIMON 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 Compania Cervecerias with a short position of SIMON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania Cervecerias and SIMON.

Diversification Opportunities for Compania Cervecerias and SIMON

0.62

Correlation Coefficient

Compania Cervecerias  SIMON

Poor diversification

The 3 months correlation between Compania and SIMON is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Compania Cervecerias Unidas 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 Compania Cervecerias 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 Compania Cervecerias Unidas are associated (or correlated) with SIMON. 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 Compania Cervecerias i.e., Compania Cervecerias and SIMON go up and down completely randomly.

Pair Corralation between Compania Cervecerias and SIMON

Considering the 90-day investment horizon Compania Cervecerias Unidas is expected to under-perform the SIMON. But the stock apears to be less risky and, when comparing its historical volatility, Compania Cervecerias Unidas is 1.06 times less risky than SIMON. The stock trades about -0.11 of its potential returns per unit of risk. The SIMON PROPERTY GROUP is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  9,313  in SIMON PROPERTY GROUP on May 21, 2025 and sell it today you would lose (107.00) from holding SIMON PROPERTY GROUP or give up 1.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Compania Cervecerias Unidas  vs.  SIMON PROPERTY GROUP

Compania Cervecerias

Risk-Adjusted Performance

Weakest

Over the last 90 days Compania Cervecerias Unidas has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

SIMON PROPERTY GROUP

Risk-Adjusted Performance

Weakest

Over the last 90 days SIMON PROPERTY GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SIMON is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Compania Cervecerias and SIMON

The main advantage of trading using opposite Compania Cervecerias and SIMON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania Cervecerias position performs unexpectedly, SIMON 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 will offset losses from the drop in SIMON's long position.

The idea behind Compania Cervecerias Unidas and SIMON PROPERTY GROUP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.