Correlation Between Simon Property and WesBanco
Can any of the company-specific risk be diversified away by investing in both Simon Property and WesBanco 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 WesBanco 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 WesBanco, you can compare the effects of market volatilities on Simon Property and WesBanco 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 WesBanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and WesBanco.
Diversification Opportunities for Simon Property and WesBanco
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Simon and WesBanco is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and WesBanco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WesBanco 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 WesBanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WesBanco has no effect on the direction of Simon Property i.e., Simon Property and WesBanco go up and down completely randomly.
Pair Corralation between Simon Property and WesBanco
Assuming the 90 days trading horizon Simon Property Group is expected to under-perform the WesBanco. In addition to that, Simon Property is 4.21 times more volatile than WesBanco. It trades about -0.14 of its total potential returns per unit of risk. WesBanco is currently generating about -0.04 per unit of volatility. If you would invest 2,525 in WesBanco on October 14, 2024 and sell it today you would lose (6.00) from holding WesBanco or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. WesBanco
Performance |
| Timeline |
| Simon Property Group |
| WesBanco |
Simon Property and WesBanco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and WesBanco
The main advantage of trading using opposite Simon Property and WesBanco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, WesBanco 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 WesBanco will offset losses from the drop in WesBanco'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 |
| WesBanco vs. Simon Property Group | WesBanco vs. Sonida Senior Living | WesBanco vs. Franklin Credit Management | WesBanco vs. Ameriprise Financial |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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