Correlation Between American Tower and Simon Property
Can any of the company-specific risk be diversified away by investing in both American Tower 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 Tower 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 Tower Corp and Simon Property Group, you can compare the effects of market volatilities on American Tower 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 Tower with a short position of Simon Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Tower and Simon Property.
Diversification Opportunities for American Tower and Simon Property
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Simon is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding American Tower Corp 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 Tower 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 Tower Corp 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 Tower i.e., American Tower and Simon Property go up and down completely randomly.
Pair Corralation between American Tower and Simon Property
Considering the 90-day investment horizon American Tower Corp is expected to under-perform the Simon Property. In addition to that, American Tower is 1.41 times more volatile than Simon Property Group. It trades about -0.1 of its total potential returns per unit of risk. Simon Property Group is currently generating about 0.04 per unit of volatility. If you would invest 17,878 in Simon Property Group on September 18, 2024 and sell it today you would earn a total of 118.00 from holding Simon Property Group or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Tower Corp vs. Simon Property Group
Performance |
| Timeline |
| American Tower Corp |
| Simon Property Group |
American Tower and Simon Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Tower and Simon Property
The main advantage of trading using opposite American Tower and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Tower 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 Tower vs. Digital Realty Trust | American Tower vs. Equinix | American Tower vs. SBA Communications Corp | American Tower vs. Iron Mountain Incorporated |
| Simon Property vs. Site Centers Corp | Simon Property vs. CBL Associates Properties | Simon Property vs. Acadia Realty Trust | Simon Property vs. Rithm Property Trust |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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