Correlation Between Simon Property and KNOT Offshore
Can any of the company-specific risk be diversified away by investing in both Simon Property and KNOT Offshore 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 KNOT Offshore 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 KNOT Offshore Partners, you can compare the effects of market volatilities on Simon Property and KNOT Offshore 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 KNOT Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and KNOT Offshore.
Diversification Opportunities for Simon Property and KNOT Offshore
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Simon and KNOT is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and KNOT Offshore Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KNOT Offshore Partners 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 KNOT Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KNOT Offshore Partners has no effect on the direction of Simon Property i.e., Simon Property and KNOT Offshore go up and down completely randomly.
Pair Corralation between Simon Property and KNOT Offshore
Assuming the 90 days trading horizon Simon Property Group is expected to generate 0.49 times more return on investment than KNOT Offshore. However, Simon Property Group is 2.03 times less risky than KNOT Offshore. It trades about -0.03 of its potential returns per unit of risk. KNOT Offshore Partners is currently generating about -0.03 per unit of risk. If you would invest 6,075 in Simon Property Group on October 23, 2024 and sell it today you would lose (75.00) from holding Simon Property Group or give up 1.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. KNOT Offshore Partners
Performance |
| Timeline |
| Simon Property Group |
| KNOT Offshore Partners |
Simon Property and KNOT Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and KNOT Offshore
The main advantage of trading using opposite Simon Property and KNOT Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, KNOT Offshore 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 KNOT Offshore will offset losses from the drop in KNOT Offshore's long position.| Simon Property vs. Wheeler Real Estate | Simon Property vs. CBL Associates Properties | Simon Property vs. Saul Centers | Simon Property vs. Federal Realty Investment |
| KNOT Offshore vs. USA Compression Partners | KNOT Offshore vs. Dynagas LNG Partners | KNOT Offshore vs. Crossamerica Partners LP | KNOT Offshore vs. Delek Logistics Partners |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |