Correlation Between Air Products and Simon Property
Can any of the company-specific risk be diversified away by investing in both Air Products 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 Air Products and Simon Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Products and and Simon Property Group, you can compare the effects of market volatilities on Air Products 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 Air Products with a short position of Simon Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Simon Property.
Diversification Opportunities for Air Products and Simon Property
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and Simon is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and 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 Air Products 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 Air Products and 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 Air Products i.e., Air Products and Simon Property go up and down completely randomly.
Pair Corralation between Air Products and Simon Property
Considering the 90-day investment horizon Air Products and is expected to generate 0.94 times more return on investment than Simon Property. However, Air Products and is 1.07 times less risky than Simon Property. It trades about 0.5 of its potential returns per unit of risk. Simon Property Group is currently generating about 0.27 per unit of risk. If you would invest 30,609 in Air Products and on September 4, 2024 and sell it today you would earn a total of 2,953 from holding Air Products and or generate 9.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products and vs. Simon Property Group
Performance |
| Timeline |
| Air Products |
| Simon Property Group |
Air Products and Simon Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Simon Property
The main advantage of trading using opposite Air Products and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products 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.| Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle Corp |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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