Correlation Between Simon Property and SL Green
Can any of the company-specific risk be diversified away by investing in both Simon Property and SL Green 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 SL Green 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 SL Green Realty, you can compare the effects of market volatilities on Simon Property and SL Green 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 SL Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and SL Green.
Diversification Opportunities for Simon Property and SL Green
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Simon and SLG is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and SL Green Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SL Green Realty 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 SL Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SL Green Realty has no effect on the direction of Simon Property i.e., Simon Property and SL Green go up and down completely randomly.
Pair Corralation between Simon Property and SL Green
Considering the 90-day investment horizon Simon Property Group is expected to generate 0.56 times more return on investment than SL Green. However, Simon Property Group is 1.77 times less risky than SL Green. It trades about 0.04 of its potential returns per unit of risk. SL Green Realty is currently generating about -0.07 per unit of risk. If you would invest 17,878 in Simon Property Group on September 18, 2024 and sell it today you would earn a total of 118.00 from holding Simon Property Group or generate 0.66% 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. SL Green Realty
Performance |
Timeline |
Simon Property Group |
SL Green Realty |
Simon Property and SL Green Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Simon Property and SL Green
The main advantage of trading using opposite Simon Property and SL Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, SL Green 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 SL Green will offset losses from the drop in SL Green's long position.Simon Property vs. Site Centers Corp | Simon Property vs. CBL Associates Properties | Simon Property vs. Acadia Realty Trust | Simon Property vs. Rithm Property Trust |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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