Correlation Between Simon Property and Artis REIT
Can any of the company-specific risk be diversified away by investing in both Simon Property and Artis REIT 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 Simon Property and Artis REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simon Property Group and Artis REIT, you can compare the effects of market volatilities on Simon Property and Artis REIT 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 Simon Property with a short position of Artis REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Artis REIT.
Diversification Opportunities for Simon Property and Artis REIT
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Simon and Artis is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Artis REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artis REIT and Simon Property 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 Simon Property Group are associated (or correlated) with Artis REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artis REIT has no effect on the direction of Simon Property i.e., Simon Property and Artis REIT go up and down completely randomly.
Pair Corralation between Simon Property and Artis REIT
Assuming the 90 days trading horizon Simon Property is expected to generate 2.84 times less return on investment than Artis REIT. But when comparing it to its historical volatility, Simon Property Group is 4.24 times less risky than Artis REIT. It trades about 0.04 of its potential returns per unit of risk. Artis REIT is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 573.00 in Artis REIT on August 27, 2024 and sell it today you would lose (21.00) from holding Artis REIT or give up 3.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.69% |
| Values | Daily Returns |
Simon Property Group vs. Artis REIT
Performance |
| Timeline |
| Simon Property Group |
| Artis REIT |
Simon Property and Artis REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Artis REIT
The main advantage of trading using opposite Simon Property and Artis REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Artis REIT 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 Artis REIT will offset losses from the drop in Artis REIT's long position.| Simon Property vs. Saul Centers | Simon Property vs. Wheeler Real Estate | Simon Property vs. Macerich Company | Simon Property vs. Simon Property Group |
| Artis REIT vs. Smart REIT | Artis REIT vs. Phillips Edison Co | Artis REIT vs. Simon Property Group | Artis REIT vs. Plaza Retail REIT |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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