Correlation Between Air Transport and Simon Property
Can any of the company-specific risk be diversified away by investing in both Air Transport 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 Transport 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 Transport Services and Simon Property Group, you can compare the effects of market volatilities on Air Transport 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 Transport with a short position of Simon Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and Simon Property.
Diversification Opportunities for Air Transport and Simon Property
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and Simon is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services 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 Transport 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 Transport Services 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 Transport i.e., Air Transport and Simon Property go up and down completely randomly.
Pair Corralation between Air Transport and Simon Property
Given the investment horizon of 90 days Air Transport Services is expected to generate 2.44 times more return on investment than Simon Property. However, Air Transport is 2.44 times more volatile than Simon Property Group. It trades about 0.05 of its potential returns per unit of risk. Simon Property Group is currently generating about 0.09 per unit of risk. If you would invest 1,703 in Air Transport Services on September 14, 2024 and sell it today you would earn a total of 488.50 from holding Air Transport Services or generate 28.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. Simon Property Group
Performance |
| Timeline |
| Air Transport Services |
| Simon Property Group |
Air Transport and Simon Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and Simon Property
The main advantage of trading using opposite Air Transport and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport 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 Transport vs. Copa Holdings SA | Air Transport vs. SkyWest | Air Transport vs. Sun Country Airlines | Air Transport vs. Frontier Group Holdings |
| Simon Property vs. Site Centers Corp | Simon Property vs. CBL Associates Properties | Simon Property vs. Urban Edge Properties | Simon Property vs. Acadia Realty 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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