Correlation Between Simon Property and Air Products
Can any of the company-specific risk be diversified away by investing in both Simon Property and Air Products 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 Air Products 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 Air Products and, you can compare the effects of market volatilities on Simon Property and Air Products 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 Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Air Products.
Diversification Opportunities for Simon Property and Air Products
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Simon and Air is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products 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 Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products has no effect on the direction of Simon Property i.e., Simon Property and Air Products go up and down completely randomly.
Pair Corralation between Simon Property and Air Products
Considering the 90-day investment horizon Simon Property is expected to generate 1.75 times less return on investment than Air Products. In addition to that, Simon Property is 1.07 times more volatile than Air Products and. It trades about 0.27 of its total potential returns per unit of risk. Air Products and is currently generating about 0.5 per unit of volatility. If you would invest 30,609 in Air Products and on September 4, 2024 and sell it today you would earn a total of 2,953 from holding Air Products and or generate 9.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. Air Products and
Performance |
| Timeline |
| Simon Property Group |
| Air Products |
Simon Property and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Air Products
The main advantage of trading using opposite Simon Property and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.| Simon Property vs. Federal Realty Investment | Simon Property vs. Agree Realty | Simon Property vs. National Retail Properties | Simon Property vs. Kimco Realty |
| Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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