Correlation Between Simon Property and Mainstreet Equity
Can any of the company-specific risk be diversified away by investing in both Simon Property and Mainstreet Equity 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 Mainstreet Equity 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 Mainstreet Equity Corp, you can compare the effects of market volatilities on Simon Property and Mainstreet Equity 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 Mainstreet Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Mainstreet Equity.
Diversification Opportunities for Simon Property and Mainstreet Equity
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Simon and Mainstreet is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Mainstreet Equity Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstreet Equity Corp 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 Mainstreet Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstreet Equity Corp has no effect on the direction of Simon Property i.e., Simon Property and Mainstreet Equity go up and down completely randomly.
Pair Corralation between Simon Property and Mainstreet Equity
Assuming the 90 days trading horizon Simon Property Group is expected to generate 0.86 times more return on investment than Mainstreet Equity. However, Simon Property Group is 1.16 times less risky than Mainstreet Equity. It trades about -0.08 of its potential returns per unit of risk. Mainstreet Equity Corp is currently generating about -0.17 per unit of risk. If you would invest 6,250 in Simon Property Group on August 27, 2024 and sell it today you would lose (70.00) from holding Simon Property Group or give up 1.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. Mainstreet Equity Corp
Performance |
| Timeline |
| Simon Property Group |
| Mainstreet Equity Corp |
Simon Property and Mainstreet Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Mainstreet Equity
The main advantage of trading using opposite Simon Property and Mainstreet Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Mainstreet Equity 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 Mainstreet Equity will offset losses from the drop in Mainstreet Equity'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 |
| Mainstreet Equity vs. Smart REIT | Mainstreet Equity vs. Phillips Edison Co | Mainstreet Equity vs. Simon Property Group | Mainstreet Equity 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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