Correlation Between Simon Property and Broadstone Net
Can any of the company-specific risk be diversified away by investing in both Simon Property and Broadstone Net 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 Broadstone Net 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 Broadstone Net Lease, you can compare the effects of market volatilities on Simon Property and Broadstone Net 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 Broadstone Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Broadstone Net.
Diversification Opportunities for Simon Property and Broadstone Net
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Simon and Broadstone is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Broadstone Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadstone Net Lease 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 Broadstone Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadstone Net Lease has no effect on the direction of Simon Property i.e., Simon Property and Broadstone Net go up and down completely randomly.
Pair Corralation between Simon Property and Broadstone Net
Considering the 90-day investment horizon Simon Property Group is expected to generate 1.02 times more return on investment than Broadstone Net. However, Simon Property is 1.02 times more volatile than Broadstone Net Lease. It trades about 0.14 of its potential returns per unit of risk. Broadstone Net Lease is currently generating about 0.05 per unit of risk. If you would invest 11,542 in Simon Property Group on August 23, 2024 and sell it today you would earn a total of 6,549 from holding Simon Property Group or generate 56.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. Broadstone Net Lease
Performance |
| Timeline |
| Simon Property Group |
| Broadstone Net Lease |
Simon Property and Broadstone Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Broadstone Net
The main advantage of trading using opposite Simon Property and Broadstone Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Broadstone Net 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 Broadstone Net will offset losses from the drop in Broadstone Net's long position.| Simon Property vs. Realty Income | Simon Property vs. First Industrial Realty | Simon Property vs. Healthcare Realty Trust | Simon Property vs. Park Hotels Resorts |
| Broadstone Net vs. Realty Income | Broadstone Net vs. Park Hotels Resorts | Broadstone Net vs. Power REIT | Broadstone Net vs. Urban Edge Properties |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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