Correlation Between Plaza Retail and Simon Property
Can any of the company-specific risk be diversified away by investing in both Plaza Retail 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 Plaza Retail and Simon Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plaza Retail REIT and Simon Property Group, you can compare the effects of market volatilities on Plaza Retail 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 Plaza Retail with a short position of Simon Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plaza Retail and Simon Property.
Diversification Opportunities for Plaza Retail and Simon Property
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Plaza and Simon is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Retail REIT 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 Plaza Retail 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 Plaza Retail REIT 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 Plaza Retail i.e., Plaza Retail and Simon Property go up and down completely randomly.
Pair Corralation between Plaza Retail and Simon Property
Assuming the 90 days horizon Plaza Retail is expected to generate 2.1 times less return on investment than Simon Property. In addition to that, Plaza Retail is 1.1 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 0.04 per unit of volatility. If you would invest 5,637 in Simon Property Group on August 28, 2024 and sell it today you would earn a total of 563.00 from holding Simon Property Group or generate 9.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 73.68% |
| Values | Daily Returns |
Plaza Retail REIT vs. Simon Property Group
Performance |
| Timeline |
| Plaza Retail REIT |
| Simon Property Group |
Plaza Retail and Simon Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plaza Retail and Simon Property
The main advantage of trading using opposite Plaza Retail and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plaza Retail 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.| Plaza Retail vs. Choice Properties Real | Plaza Retail vs. CT Real Estate | Plaza Retail vs. Firm Capital Property | Plaza Retail vs. Slate Grocery REIT |
| Simon Property vs. Kimco Realty | Simon Property vs. Saul Centers | Simon Property vs. Saul Centers | Simon Property vs. Urban Edge Properties |
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.
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