Correlation Between Simon Property and CBL Associates
Can any of the company-specific risk be diversified away by investing in both Simon Property and CBL Associates 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 CBL Associates 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 CBL Associates Properties, you can compare the effects of market volatilities on Simon Property and CBL Associates 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 CBL Associates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and CBL Associates.
Diversification Opportunities for Simon Property and CBL Associates
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Simon and CBL is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and CBL Associates Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBL Associates Properties 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 CBL Associates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBL Associates Properties has no effect on the direction of Simon Property i.e., Simon Property and CBL Associates go up and down completely randomly.
Pair Corralation between Simon Property and CBL Associates
Considering the 90-day investment horizon Simon Property is expected to generate 2.78 times less return on investment than CBL Associates. But when comparing it to its historical volatility, Simon Property Group is 1.2 times less risky than CBL Associates. It trades about 0.19 of its potential returns per unit of risk. CBL Associates Properties is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 2,708 in CBL Associates Properties on August 28, 2024 and sell it today you would earn a total of 349.00 from holding CBL Associates Properties or generate 12.89% 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. CBL Associates Properties
Performance |
| Timeline |
| Simon Property Group |
| CBL Associates Properties |
Simon Property and CBL Associates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and CBL Associates
The main advantage of trading using opposite Simon Property and CBL Associates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, CBL Associates 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 CBL Associates will offset losses from the drop in CBL Associates' long position.| Simon Property vs. Federal Realty Investment | Simon Property vs. Agree Realty | Simon Property vs. National Retail Properties | Simon Property vs. Kimco Realty |
| CBL Associates vs. Investcorp Credit Management | CBL Associates vs. Medalist Diversified Reit | CBL Associates vs. Aquagold International | CBL Associates 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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