Correlation Between Simon Property and Skechers USA
Can any of the company-specific risk be diversified away by investing in both Simon Property and Skechers USA 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 Skechers USA 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 Skechers USA, you can compare the effects of market volatilities on Simon Property and Skechers USA 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 Skechers USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Skechers USA.
Diversification Opportunities for Simon Property and Skechers USA
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Simon and Skechers is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Skechers USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skechers USA 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 Skechers USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skechers USA has no effect on the direction of Simon Property i.e., Simon Property and Skechers USA go up and down completely randomly.
Pair Corralation between Simon Property and Skechers USA
Considering the 90-day investment horizon Simon Property Group is expected to under-perform the Skechers USA. But the stock apears to be less risky and, when comparing its historical volatility, Simon Property Group is 2.01 times less risky than Skechers USA. The stock trades about -0.03 of its potential returns per unit of risk. The Skechers USA is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 6,101 in Skechers USA on September 12, 2024 and sell it today you would earn a total of 986.00 from holding Skechers USA or generate 16.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. Skechers USA
Performance |
| Timeline |
| Simon Property Group |
| Skechers USA |
Simon Property and Skechers USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Skechers USA
The main advantage of trading using opposite Simon Property and Skechers USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Skechers USA 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 Skechers USA will offset losses from the drop in Skechers USA's long position.| Simon Property vs. Federal Realty Investment | Simon Property vs. Agree Realty | Simon Property vs. National Retail Properties | Simon Property vs. Kimco Realty |
| Skechers USA vs. Crocs Inc | Skechers USA vs. On Holding | Skechers USA vs. Nike Inc | Skechers USA vs. Designer Brands |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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