Correlation Between Simon Property and Global Healthcare
Can any of the company-specific risk be diversified away by investing in both Simon Property and Global Healthcare 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 Global Healthcare 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 Global Healthcare REIT, you can compare the effects of market volatilities on Simon Property and Global Healthcare 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 Global Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Global Healthcare.
Diversification Opportunities for Simon Property and Global Healthcare
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Simon and Global is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Global Healthcare REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Healthcare 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 Global Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Healthcare REIT has no effect on the direction of Simon Property i.e., Simon Property and Global Healthcare go up and down completely randomly.
Pair Corralation between Simon Property and Global Healthcare
Assuming the 90 days trading horizon Simon Property Group is expected to under-perform the Global Healthcare. But the preferred stock apears to be less risky and, when comparing its historical volatility, Simon Property Group is 12.42 times less risky than Global Healthcare. The preferred stock trades about -0.07 of its potential returns per unit of risk. The Global Healthcare REIT is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 178.00 in Global Healthcare REIT on August 25, 2024 and sell it today you would lose (8.00) from holding Global Healthcare REIT or give up 4.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. Global Healthcare REIT
Performance |
| Timeline |
| Simon Property Group |
| Global Healthcare REIT |
Simon Property and Global Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Global Healthcare
The main advantage of trading using opposite Simon Property and Global Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Global Healthcare 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 Global Healthcare will offset losses from the drop in Global Healthcare's long position.| Simon Property vs. Kimco Realty | Simon Property vs. Saul Centers | Simon Property vs. Saul Centers | Simon Property vs. Urban Edge Properties |
| Global Healthcare vs. Smart REIT | Global Healthcare vs. Phillips Edison Co | Global Healthcare vs. Simon Property Group | Global Healthcare 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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