Correlation Between Simon Property and China Tontine
Can any of the company-specific risk be diversified away by investing in both Simon Property and China Tontine 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 China Tontine 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 China Tontine Wines, you can compare the effects of market volatilities on Simon Property and China Tontine 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 China Tontine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and China Tontine.
Diversification Opportunities for Simon Property and China Tontine
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Simon and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and China Tontine Wines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Tontine Wines 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 China Tontine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Tontine Wines has no effect on the direction of Simon Property i.e., Simon Property and China Tontine go up and down completely randomly.
Pair Corralation between Simon Property and China Tontine
Considering the 90-day investment horizon Simon Property is expected to generate 83.1 times less return on investment than China Tontine. But when comparing it to its historical volatility, Simon Property Group is 69.05 times less risky than China Tontine. It trades about 0.08 of its potential returns per unit of risk. China Tontine Wines is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.20 in China Tontine Wines on August 24, 2024 and sell it today you would earn a total of 6.90 from holding China Tontine Wines or generate 3450.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Simon Property Group vs. China Tontine Wines
Performance |
| Timeline |
| Simon Property Group |
| China Tontine Wines |
Simon Property and China Tontine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and China Tontine
The main advantage of trading using opposite Simon Property and China Tontine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, China Tontine 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 China Tontine will offset losses from the drop in China Tontine's long position.| Simon Property vs. Federal Realty Investment | Simon Property vs. Agree Realty | Simon Property vs. Tanger Factory Outlet | Simon Property vs. Netstreit Corp |
| China Tontine vs. Diageo PLC ADR | China Tontine vs. Constellation Brands Class | China Tontine vs. Thai Beverage PCL | China Tontine vs. Morningstar Unconstrained Allocation |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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