Correlation Between Simon Property and Holiday Island
Can any of the company-specific risk be diversified away by investing in both Simon Property and Holiday Island 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 Holiday Island 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 Holiday Island Holdings, you can compare the effects of market volatilities on Simon Property and Holiday Island 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 Holiday Island. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Holiday Island.
Diversification Opportunities for Simon Property and Holiday Island
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Simon and Holiday is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Holiday Island Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holiday Island Holdings 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 Holiday Island. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holiday Island Holdings has no effect on the direction of Simon Property i.e., Simon Property and Holiday Island go up and down completely randomly.
Pair Corralation between Simon Property and Holiday Island
Assuming the 90 days trading horizon Simon Property Group is expected to under-perform the Holiday Island. But the preferred stock apears to be less risky and, when comparing its historical volatility, Simon Property Group is 27.74 times less risky than Holiday Island. The preferred stock trades about -0.05 of its potential returns per unit of risk. The Holiday Island Holdings is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2.60 in Holiday Island Holdings on August 28, 2024 and sell it today you would lose (0.73) from holding Holiday Island Holdings or give up 28.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Simon Property Group vs. Holiday Island Holdings
Performance |
| Timeline |
| Simon Property Group |
| Holiday Island Holdings |
Simon Property and Holiday Island Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Holiday Island
The main advantage of trading using opposite Simon Property and Holiday Island positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Holiday Island 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 Holiday Island will offset losses from the drop in Holiday Island's long position.| Simon Property vs. Kimco Realty | Simon Property vs. Saul Centers | Simon Property vs. Saul Centers | Simon Property vs. Urban Edge Properties |
| Holiday Island vs. Hong Kong Land | Holiday Island vs. Wharf Holdings | Holiday Island vs. Sun Hung Kai | Holiday Island vs. Bayport International Holdings |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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