Correlation Between Grocery Outlet and Simon Property
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet 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 Grocery Outlet and Simon Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grocery Outlet Holding and Simon Property Group, you can compare the effects of market volatilities on Grocery Outlet 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 Grocery Outlet with a short position of Simon Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Simon Property.
Diversification Opportunities for Grocery Outlet and Simon Property
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grocery and Simon is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding 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 Grocery Outlet 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 Grocery Outlet Holding 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 Grocery Outlet i.e., Grocery Outlet and Simon Property go up and down completely randomly.
Pair Corralation between Grocery Outlet and Simon Property
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to generate 1.93 times more return on investment than Simon Property. However, Grocery Outlet is 1.93 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 0.07 per unit of risk. If you would invest 1,571 in Grocery Outlet Holding on October 23, 2024 and sell it today you would earn a total of 24.00 from holding Grocery Outlet Holding or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grocery Outlet Holding vs. Simon Property Group
Performance |
| Timeline |
| Grocery Outlet Holding |
| Simon Property Group |
Grocery Outlet and Simon Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and Simon Property
The main advantage of trading using opposite Grocery Outlet and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet 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.| Grocery Outlet vs. Natural Grocers by | Grocery Outlet vs. Village Super Market | Grocery Outlet vs. Ingles Markets Incorporated | Grocery Outlet vs. Ocado Group plc |
| Simon Property vs. Wheeler Real Estate | Simon Property vs. CBL Associates Properties | Simon Property vs. Saul Centers | Simon Property vs. Federal Realty Investment |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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