Correlation Between Simon Property and Rithm Property
Can any of the company-specific risk be diversified away by investing in both Simon Property and Rithm Property 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 Rithm Property 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 Rithm Property Trust, you can compare the effects of market volatilities on Simon Property and Rithm Property 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 Rithm Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Rithm Property.
Diversification Opportunities for Simon Property and Rithm Property
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Simon and Rithm is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Rithm Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rithm Property Trust 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 Rithm Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rithm Property Trust has no effect on the direction of Simon Property i.e., Simon Property and Rithm Property go up and down completely randomly.
Pair Corralation between Simon Property and Rithm Property
Assuming the 90 days trading horizon Simon Property Group is expected to generate 0.45 times more return on investment than Rithm Property. However, Simon Property Group is 2.22 times less risky than Rithm Property. It trades about 0.03 of its potential returns per unit of risk. Rithm Property Trust is currently generating about -0.05 per unit of risk. If you would invest 5,143 in Simon Property Group on October 24, 2024 and sell it today you would earn a total of 807.00 from holding Simon Property Group or generate 15.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Simon Property Group vs. Rithm Property Trust
Performance |
| Timeline |
| Simon Property Group |
| Rithm Property Trust |
Simon Property and Rithm Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Rithm Property
The main advantage of trading using opposite Simon Property and Rithm Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Rithm Property 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 Rithm Property will offset losses from the drop in Rithm Property's long position.| Simon Property vs. Kimco Realty | Simon Property vs. Saul Centers | Simon Property vs. Saul Centers | Simon Property vs. Urban Edge Properties |
| Rithm Property vs. Urban Edge Properties | Rithm Property vs. Kite Realty Group | Rithm Property vs. Retail Opportunity Investments | Rithm Property vs. Inventrust Properties Corp |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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