Correlation Between Simon Property and HNI Corp
Can any of the company-specific risk be diversified away by investing in both Simon Property and HNI Corp 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 HNI Corp 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 HNI Corp, you can compare the effects of market volatilities on Simon Property and HNI Corp 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 HNI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and HNI Corp.
Diversification Opportunities for Simon Property and HNI Corp
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Simon and HNI is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and HNI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corp 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 HNI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNI Corp has no effect on the direction of Simon Property i.e., Simon Property and HNI Corp go up and down completely randomly.
Pair Corralation between Simon Property and HNI Corp
Considering the 90-day investment horizon Simon Property is expected to generate 1.88 times less return on investment than HNI Corp. But when comparing it to its historical volatility, Simon Property Group is 1.57 times less risky than HNI Corp. It trades about 0.26 of its potential returns per unit of risk. HNI Corp is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 4,988 in HNI Corp on August 30, 2024 and sell it today you would earn a total of 639.00 from holding HNI Corp or generate 12.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. HNI Corp
Performance |
| Timeline |
| Simon Property Group |
| HNI Corp |
Simon Property and HNI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and HNI Corp
The main advantage of trading using opposite Simon Property and HNI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, HNI Corp 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 HNI Corp will offset losses from the drop in HNI Corp's long position.| Simon Property vs. Saul Centers | Simon Property vs. Site Centers Corp | Simon Property vs. Acadia Realty Trust | Simon Property vs. Retail Opportunity Investments |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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