Correlation Between Simon Property and Retail Opportunity
Can any of the company-specific risk be diversified away by investing in both Simon Property and Retail Opportunity 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 Retail Opportunity 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 Retail Opportunity Investments, you can compare the effects of market volatilities on Simon Property and Retail Opportunity 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 Retail Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Retail Opportunity.
Diversification Opportunities for Simon Property and Retail Opportunity
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Simon and Retail is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Retail Opportunity Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Opportunity 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 Retail Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Opportunity has no effect on the direction of Simon Property i.e., Simon Property and Retail Opportunity go up and down completely randomly.
Pair Corralation between Simon Property and Retail Opportunity
Assuming the 90 days trading horizon Simon Property Group is expected to under-perform the Retail Opportunity. In addition to that, Simon Property is 6.82 times more volatile than Retail Opportunity Investments. It trades about -0.05 of its total potential returns per unit of risk. Retail Opportunity Investments is currently generating about 0.15 per unit of volatility. If you would invest 1,728 in Retail Opportunity Investments on November 4, 2024 and sell it today you would earn a total of 16.00 from holding Retail Opportunity Investments or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. Retail Opportunity Investments
Performance |
| Timeline |
| Simon Property Group |
| Retail Opportunity |
Simon Property and Retail Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Retail Opportunity
The main advantage of trading using opposite Simon Property and Retail Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Retail Opportunity 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 Retail Opportunity will offset losses from the drop in Retail Opportunity's long position.| Simon Property vs. Kimco Realty | Simon Property vs. Saul Centers | Simon Property vs. Saul Centers | Simon Property vs. Urban Edge Properties |
| Retail Opportunity vs. Kite Realty Group | Retail Opportunity vs. Rithm Property Trust | Retail Opportunity vs. Urban Edge Properties | Retail Opportunity vs. Acadia Realty Trust |
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 Stocks Directory module to find actively traded stocks across global markets.
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