Correlation Between Simon Property and Inventrust Properties
Can any of the company-specific risk be diversified away by investing in both Simon Property and Inventrust Properties 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 Inventrust Properties 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 Inventrust Properties Corp, you can compare the effects of market volatilities on Simon Property and Inventrust Properties 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 Inventrust Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Inventrust Properties.
Diversification Opportunities for Simon Property and Inventrust Properties
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Simon and Inventrust is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Inventrust Properties Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inventrust 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 Inventrust Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inventrust Properties has no effect on the direction of Simon Property i.e., Simon Property and Inventrust Properties go up and down completely randomly.
Pair Corralation between Simon Property and Inventrust Properties
Considering the 90-day investment horizon Simon Property Group is expected to generate 1.05 times more return on investment than Inventrust Properties. However, Simon Property is 1.05 times more volatile than Inventrust Properties Corp. It trades about 0.27 of its potential returns per unit of risk. Inventrust Properties Corp is currently generating about 0.27 per unit of risk. If you would invest 17,198 in Simon Property Group on August 30, 2024 and sell it today you would earn a total of 1,177 from holding Simon Property Group or generate 6.84% 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. Inventrust Properties Corp
Performance |
| Timeline |
| Simon Property Group |
| Inventrust Properties |
Simon Property and Inventrust Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Inventrust Properties
The main advantage of trading using opposite Simon Property and Inventrust Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Inventrust Properties 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 Inventrust Properties will offset losses from the drop in Inventrust Properties' long position.| Simon Property vs. Federal Realty Investment | Simon Property vs. Agree Realty | Simon Property vs. National Retail Properties | Simon Property vs. Kimco Realty |
| Inventrust Properties vs. CBL Associates Properties | Inventrust Properties vs. Cedar Realty Trust | Inventrust Properties vs. Simon Property Group | Inventrust Properties vs. Realty Income |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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