Correlation Between Simon Property and Industrial Logistics
Can any of the company-specific risk be diversified away by investing in both Simon Property and Industrial Logistics 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 Industrial Logistics 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 Industrial Logistics Properties, you can compare the effects of market volatilities on Simon Property and Industrial Logistics 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 Industrial Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Industrial Logistics.
Diversification Opportunities for Simon Property and Industrial Logistics
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Simon and Industrial is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Industrial Logistics Propertie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Logistics 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 Industrial Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Logistics has no effect on the direction of Simon Property i.e., Simon Property and Industrial Logistics go up and down completely randomly.
Pair Corralation between Simon Property and Industrial Logistics
Considering the 90-day investment horizon Simon Property is expected to generate 1.62 times less return on investment than Industrial Logistics. But when comparing it to its historical volatility, Simon Property Group is 3.01 times less risky than Industrial Logistics. It trades about 0.12 of its potential returns per unit of risk. Industrial Logistics Properties is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 192.00 in Industrial Logistics Properties on August 31, 2024 and sell it today you would earn a total of 195.00 from holding Industrial Logistics Properties or generate 101.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. Industrial Logistics Propertie
Performance |
| Timeline |
| Simon Property Group |
| Industrial Logistics |
Simon Property and Industrial Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Industrial Logistics
The main advantage of trading using opposite Simon Property and Industrial Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Industrial Logistics 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 Industrial Logistics will offset losses from the drop in Industrial Logistics' long position.| Simon Property vs. Federal Realty Investment | Simon Property vs. Agree Realty | Simon Property vs. National Retail Properties | Simon Property vs. Kimco Realty |
| Industrial Logistics vs. Terreno Realty | Industrial Logistics vs. LXP Industrial Trust | Industrial Logistics vs. Rexford Industrial Realty | Industrial Logistics vs. First Industrial Realty |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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