Correlation Between Simon Property and City Office
Can any of the company-specific risk be diversified away by investing in both Simon Property and City Office 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 City Office 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 City Office, you can compare the effects of market volatilities on Simon Property and City Office 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 City Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and City Office.
Diversification Opportunities for Simon Property and City Office
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Simon and City is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and City Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Office 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 City Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Office has no effect on the direction of Simon Property i.e., Simon Property and City Office go up and down completely randomly.
Pair Corralation between Simon Property and City Office
Considering the 90-day investment horizon Simon Property Group is expected to generate 0.43 times more return on investment than City Office. However, Simon Property Group is 2.35 times less risky than City Office. It trades about 0.14 of its potential returns per unit of risk. City Office is currently generating about 0.03 per unit of risk. If you would invest 11,579 in Simon Property Group on August 24, 2024 and sell it today you would earn a total of 6,644 from holding Simon Property Group or generate 57.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. City Office
Performance |
| Timeline |
| Simon Property Group |
| City Office |
Simon Property and City Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and City Office
The main advantage of trading using opposite Simon Property and City Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, City Office 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 City Office will offset losses from the drop in City Office'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 |
| City Office vs. Hudson Pacific Properties | City Office vs. Piedmont Office Realty | City Office vs. Office Properties Income | City Office vs. Kilroy Realty 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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