Correlation Between CF Industries and Simon Property
Can any of the company-specific risk be diversified away by investing in both CF Industries 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 CF Industries and Simon Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CF Industries Holdings and Simon Property Group, you can compare the effects of market volatilities on CF Industries 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 CF Industries with a short position of Simon Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Industries and Simon Property.
Diversification Opportunities for CF Industries and Simon Property
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CF Industries and Simon is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding CF Industries Holdings 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 CF Industries 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 CF Industries Holdings 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 CF Industries i.e., CF Industries and Simon Property go up and down completely randomly.
Pair Corralation between CF Industries and Simon Property
Allowing for the 90-day total investment horizon CF Industries is expected to generate 3.74 times less return on investment than Simon Property. In addition to that, CF Industries is 1.27 times more volatile than Simon Property Group. It trades about 0.02 of its total potential returns per unit of risk. Simon Property Group is currently generating about 0.08 per unit of volatility. If you would invest 10,695 in Simon Property Group on August 31, 2024 and sell it today you would earn a total of 7,665 from holding Simon Property Group or generate 71.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
CF Industries Holdings vs. Simon Property Group
Performance |
| Timeline |
| CF Industries Holdings |
| Simon Property Group |
CF Industries and Simon Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Industries and Simon Property
The main advantage of trading using opposite CF Industries and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Industries 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.| CF Industries vs. Nutrien | CF Industries vs. Intrepid Potash | CF Industries vs. Corteva | CF Industries vs. ICL Israel Chemicals |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |