Correlation Between Simon Property and Sotherly Hotels
Can any of the company-specific risk be diversified away by investing in both Simon Property and Sotherly Hotels 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 Sotherly Hotels 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 Sotherly Hotels, you can compare the effects of market volatilities on Simon Property and Sotherly Hotels 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 Sotherly Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Sotherly Hotels.
Diversification Opportunities for Simon Property and Sotherly Hotels
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Simon and Sotherly is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Sotherly Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotherly Hotels 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 Sotherly Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotherly Hotels has no effect on the direction of Simon Property i.e., Simon Property and Sotherly Hotels go up and down completely randomly.
Pair Corralation between Simon Property and Sotherly Hotels
Considering the 90-day investment horizon Simon Property is expected to generate 23.87 times less return on investment than Sotherly Hotels. But when comparing it to its historical volatility, Simon Property Group is 3.51 times less risky than Sotherly Hotels. It trades about 0.01 of its potential returns per unit of risk. Sotherly Hotels is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 106.00 in Sotherly Hotels on September 14, 2024 and sell it today you would earn a total of 2.00 from holding Sotherly Hotels or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. Sotherly Hotels
Performance |
| Timeline |
| Simon Property Group |
| Sotherly Hotels |
Simon Property and Sotherly Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Sotherly Hotels
The main advantage of trading using opposite Simon Property and Sotherly Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Sotherly Hotels 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 Sotherly Hotels will offset losses from the drop in Sotherly Hotels' long position.| Simon Property vs. Site Centers Corp | Simon Property vs. CBL Associates Properties | Simon Property vs. Urban Edge Properties | Simon Property vs. Acadia Realty Trust |
| Sotherly Hotels vs. Summit Hotel Properties | Sotherly Hotels vs. Diamondrock Hospitality | Sotherly Hotels vs. RLJ Lodging Trust | Sotherly Hotels vs. Chatham Lodging 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |