Correlation Between Boston Beer and SIMON

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

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

Diversification Opportunities for Boston Beer and SIMON

0.08

Correlation Coefficient

Boston Beer  SIMON

Significant diversification

The 3 months correlation between Boston and SIMON is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and SIMON PPTY GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIMON PPTY GROUP and Boston Beer 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 Boston Beer 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 PPTY GROUP has no effect on the direction of Boston Beer i.e., Boston Beer and SIMON go up and down completely randomly.

Pair Corralation between Boston Beer and SIMON

Considering the 90-day investment horizon Boston Beer is expected to under-perform the SIMON. In addition to that, Boston Beer is 2.63 times more volatile than SIMON PPTY GROUP. It trades about -0.06 of its total potential returns per unit of risk. SIMON PPTY GROUP is currently generating about 0.01 per unit of volatility. If you would invest  8,716  in SIMON PPTY GROUP on May 17, 2025 and sell it today you would earn a total of  30.00  from holding SIMON PPTY GROUP or generate 0.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	68.85%
Values	Daily Returns

Boston Beer  vs.  SIMON PPTY GROUP

Boston Beer

Risk-Adjusted Performance

Weakest

Over the last 90 days Boston Beer has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

SIMON PPTY GROUP

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SIMON PPTY GROUP are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SIMON is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Boston Beer and SIMON

The main advantage of trading using opposite Boston Beer and SIMON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer 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 Boston Beer and SIMON PPTY 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.