Correlation Between Simon Property and One Liberty
Can any of the company-specific risk be diversified away by investing in both Simon Property and One Liberty 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 One Liberty 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 One Liberty Properties, you can compare the effects of market volatilities on Simon Property and One Liberty 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 One Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and One Liberty.
Diversification Opportunities for Simon Property and One Liberty
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Simon and One is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and One Liberty Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Liberty 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 One Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Liberty Properties has no effect on the direction of Simon Property i.e., Simon Property and One Liberty go up and down completely randomly.
Pair Corralation between Simon Property and One Liberty
Considering the 90-day investment horizon Simon Property is expected to generate 1.19 times less return on investment than One Liberty. But when comparing it to its historical volatility, Simon Property Group is 1.51 times less risky than One Liberty. It trades about 0.26 of its potential returns per unit of risk. One Liberty Properties is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,682 in One Liberty Properties on August 26, 2024 and sell it today you would earn a total of 196.00 from holding One Liberty Properties or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. One Liberty Properties
Performance |
| Timeline |
| Simon Property Group |
| One Liberty Properties |
Simon Property and One Liberty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and One Liberty
The main advantage of trading using opposite Simon Property and One Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, One Liberty 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 One Liberty will offset losses from the drop in One Liberty'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 |
| One Liberty vs. Generationome Properties | One Liberty vs. Modiv Inc | One Liberty vs. Armada Hflr Pr | One Liberty vs. NexPoint Diversified Real |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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