Correlation Between Simon Property and Coupang LLC
Can any of the company-specific risk be diversified away by investing in both Simon Property and Coupang LLC 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 Coupang LLC 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 Coupang LLC, you can compare the effects of market volatilities on Simon Property and Coupang LLC 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 Coupang LLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Coupang LLC.
Diversification Opportunities for Simon Property and Coupang LLC
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Simon and Coupang is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Coupang LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coupang LLC 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 Coupang LLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coupang LLC has no effect on the direction of Simon Property i.e., Simon Property and Coupang LLC go up and down completely randomly.
Pair Corralation between Simon Property and Coupang LLC
Considering the 90-day investment horizon Simon Property Group is expected to generate 0.6 times more return on investment than Coupang LLC. However, Simon Property Group is 1.67 times less risky than Coupang LLC. It trades about 0.08 of its potential returns per unit of risk. Coupang LLC is currently generating about 0.04 per unit of risk. If you would invest 10,478 in Simon Property Group on August 26, 2024 and sell it today you would earn a total of 7,636 from holding Simon Property Group or generate 72.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. Coupang LLC
Performance |
| Timeline |
| Simon Property Group |
| Coupang LLC |
Simon Property and Coupang LLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Coupang LLC
The main advantage of trading using opposite Simon Property and Coupang LLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Coupang LLC 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 Coupang LLC will offset losses from the drop in Coupang LLC's long position.| Simon Property vs. Site Centers Corp | Simon Property vs. Inventrust Properties Corp | Simon Property vs. Retail Opportunity Investments | Simon Property vs. Netstreit Corp |
| Coupang LLC vs. MercadoLibre | Coupang LLC vs. PDD Holdings | Coupang LLC vs. JD Inc Adr | Coupang LLC vs. Alibaba Group Holding |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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