Correlation Between Simon Property and Pekin Life
Can any of the company-specific risk be diversified away by investing in both Simon Property and Pekin Life 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 Pekin Life 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 Pekin Life Insurance, you can compare the effects of market volatilities on Simon Property and Pekin Life 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 Pekin Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Pekin Life.
Diversification Opportunities for Simon Property and Pekin Life
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Simon and Pekin is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Pekin Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pekin Life Insurance 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 Pekin Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pekin Life Insurance has no effect on the direction of Simon Property i.e., Simon Property and Pekin Life go up and down completely randomly.
Pair Corralation between Simon Property and Pekin Life
Assuming the 90 days trading horizon Simon Property Group is expected to generate 2.97 times more return on investment than Pekin Life. However, Simon Property is 2.97 times more volatile than Pekin Life Insurance. It trades about 0.07 of its potential returns per unit of risk. Pekin Life Insurance is currently generating about -0.22 per unit of risk. If you would invest 5,910 in Simon Property Group on October 23, 2024 and sell it today you would earn a total of 90.00 from holding Simon Property Group or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. Pekin Life Insurance
Performance |
| Timeline |
| Simon Property Group |
| Pekin Life Insurance |
Simon Property and Pekin Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Pekin Life
The main advantage of trading using opposite Simon Property and Pekin Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Pekin Life 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 Pekin Life will offset losses from the drop in Pekin Life'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 |
| Pekin Life vs. FG Annuities Life | Pekin Life vs. MetLife Preferred Stock | Pekin Life vs. Brighthouse Financial | Pekin Life vs. MetLife Preferred Stock |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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