Correlation Between Retail Opportunity and Simon Property
Can any of the company-specific risk be diversified away by investing in both Retail Opportunity 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 Retail Opportunity and Simon Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Opportunity Investments and Simon Property Group, you can compare the effects of market volatilities on Retail Opportunity 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 Retail Opportunity with a short position of Simon Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Opportunity and Simon Property.
Diversification Opportunities for Retail Opportunity and Simon Property
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Retail and Simon is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Retail Opportunity Investments 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 Retail Opportunity 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 Retail Opportunity Investments 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 Retail Opportunity i.e., Retail Opportunity and Simon Property go up and down completely randomly.
Pair Corralation between Retail Opportunity and Simon Property
Given the investment horizon of 90 days Retail Opportunity Investments is expected to generate 1.73 times more return on investment than Simon Property. However, Retail Opportunity is 1.73 times more volatile than Simon Property Group. It trades about 0.25 of its potential returns per unit of risk. Simon Property Group is currently generating about 0.25 per unit of risk. If you would invest 1,566 in Retail Opportunity Investments on August 29, 2024 and sell it today you would earn a total of 173.00 from holding Retail Opportunity Investments or generate 11.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Opportunity Investments vs. Simon Property Group
Performance |
| Timeline |
| Retail Opportunity |
| Simon Property Group |
Retail Opportunity and Simon Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Opportunity and Simon Property
The main advantage of trading using opposite Retail Opportunity and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Opportunity 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.| Retail Opportunity vs. CBL Associates Properties | Retail Opportunity vs. Cedar Realty Trust | Retail Opportunity vs. Simon Property Group | Retail Opportunity vs. Realty Income |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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