Correlation Between Snap and Simon Property
Can any of the company-specific risk be diversified away by investing in both Snap 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 Snap and Simon Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Simon Property Group, you can compare the effects of market volatilities on Snap 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 Snap with a short position of Simon Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Simon Property.
Diversification Opportunities for Snap and Simon Property
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and Simon is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc 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 Snap 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 Snap Inc 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 Snap i.e., Snap and Simon Property go up and down completely randomly.
Pair Corralation between Snap and Simon Property
Given the investment horizon of 90 days Snap Inc is expected to generate 4.02 times more return on investment than Simon Property. However, Snap is 4.02 times more volatile than Simon Property Group. It trades about 0.08 of its potential returns per unit of risk. Simon Property Group is currently generating about 0.27 per unit of risk. If you would invest 1,089 in Snap Inc on August 30, 2024 and sell it today you would earn a total of 72.00 from holding Snap Inc or generate 6.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Snap Inc vs. Simon Property Group
Performance |
| Timeline |
| Snap Inc |
| Simon Property Group |
Snap and Simon Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Simon Property
The main advantage of trading using opposite Snap and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap 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.The idea behind Snap Inc and Simon Property Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Simon Property vs. Saul Centers | Simon Property vs. Site Centers Corp | Simon Property vs. Kite Realty Group | 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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