Correlation Between Simon Property and Aegon NV
Can any of the company-specific risk be diversified away by investing in both Simon Property and Aegon NV 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 Aegon NV 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 Aegon NV ADR, you can compare the effects of market volatilities on Simon Property and Aegon NV 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 Aegon NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Aegon NV.
Diversification Opportunities for Simon Property and Aegon NV
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Simon and Aegon is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Aegon NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon NV ADR 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 Aegon NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegon NV ADR has no effect on the direction of Simon Property i.e., Simon Property and Aegon NV go up and down completely randomly.
Pair Corralation between Simon Property and Aegon NV
Considering the 90-day investment horizon Simon Property Group is expected to generate 0.85 times more return on investment than Aegon NV. However, Simon Property Group is 1.17 times less risky than Aegon NV. It trades about 0.13 of its potential returns per unit of risk. Aegon NV ADR is currently generating about 0.05 per unit of risk. If you would invest 14,957 in Simon Property Group on September 3, 2024 and sell it today you would earn a total of 3,403 from holding Simon Property Group or generate 22.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. Aegon NV ADR
Performance |
| Timeline |
| Simon Property Group |
| Aegon NV ADR |
Simon Property and Aegon NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Aegon NV
The main advantage of trading using opposite Simon Property and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Aegon NV 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 Aegon NV will offset losses from the drop in Aegon NV's long position.| Simon Property vs. Federal Realty Investment | Simon Property vs. Agree Realty | Simon Property vs. National Retail Properties | Simon Property vs. Kimco Realty |
| Aegon NV vs. Global Indemnity PLC | Aegon NV vs. Erie Indemnity | Aegon NV vs. AMERISAFE | Aegon NV vs. Diamond Hill Investment |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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