Correlation Between American Healthcare and Simon Property
Can any of the company-specific risk be diversified away by investing in both American Healthcare and Simon Property 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 American Healthcare and Simon Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Healthcare REIT, and Simon Property Group, you can compare the effects of market volatilities on American Healthcare and Simon Property 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 American Healthcare with a short position of Simon Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Healthcare and Simon Property.
Diversification Opportunities for American Healthcare and Simon Property
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Simon is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding American Healthcare REIT, 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 American Healthcare 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 American Healthcare REIT, are associated (or correlated) with Simon Property. 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 American Healthcare i.e., American Healthcare and Simon Property go up and down completely randomly.
Pair Corralation between American Healthcare and Simon Property
Considering the 90-day investment horizon American Healthcare REIT, is expected to generate 1.71 times more return on investment than Simon Property. However, American Healthcare is 1.71 times more volatile than Simon Property Group. It trades about 0.11 of its potential returns per unit of risk. Simon Property Group is currently generating about 0.15 per unit of risk. If you would invest 2,645 in American Healthcare REIT, on August 26, 2024 and sell it today you would earn a total of 213.00 from holding American Healthcare REIT, or generate 8.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Healthcare REIT, vs. Simon Property Group
Performance |
| Timeline |
| American Healthcare REIT, |
| Simon Property Group |
American Healthcare and Simon Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Healthcare and Simon Property
The main advantage of trading using opposite American Healthcare and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Healthcare position performs unexpectedly, Simon Property 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 Property will offset losses from the drop in Simon Property's long position.| American Healthcare vs. Aspen Insurance Holdings | American Healthcare vs. Delta Air Lines | American Healthcare vs. Pekin Life Insurance | American Healthcare vs. The Hanover Insurance |
| Simon Property vs. Federal Realty Investment | Simon Property vs. Agree Realty | Simon Property vs. National Retail Properties | Simon Property vs. Kimco Realty |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |