Correlation Between Simon Property and Saul Centers
Can any of the company-specific risk be diversified away by investing in both Simon Property and Saul Centers 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 Saul Centers 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 Saul Centers, you can compare the effects of market volatilities on Simon Property and Saul Centers 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 Saul Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Saul Centers.
Diversification Opportunities for Simon Property and Saul Centers
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Simon and Saul is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Saul Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saul Centers 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 Saul Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saul Centers has no effect on the direction of Simon Property i.e., Simon Property and Saul Centers go up and down completely randomly.
Pair Corralation between Simon Property and Saul Centers
Assuming the 90 days trading horizon Simon Property Group is expected to under-perform the Saul Centers. But the preferred stock apears to be less risky and, when comparing its historical volatility, Simon Property Group is 1.81 times less risky than Saul Centers. The preferred stock trades about -0.11 of its potential returns per unit of risk. The Saul Centers is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,966 in Saul Centers on August 29, 2024 and sell it today you would earn a total of 99.00 from holding Saul Centers or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. Saul Centers
Performance |
| Timeline |
| Simon Property Group |
| Saul Centers |
Simon Property and Saul Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Saul Centers
The main advantage of trading using opposite Simon Property and Saul Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Saul Centers 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 Saul Centers will offset losses from the drop in Saul Centers' long position.| Simon Property vs. Saul Centers | Simon Property vs. Kimco Realty | Simon Property vs. Wheeler Real Estate | Simon Property vs. Macerich Company |
| Saul Centers vs. CBL Associates Properties | Saul Centers vs. Cedar Realty Trust | Saul Centers vs. Simon Property Group | Saul Centers vs. Realty Income |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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