Correlation Between Simon Property and STAG Industrial
Can any of the company-specific risk be diversified away by investing in both Simon Property and STAG Industrial 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 STAG Industrial 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 STAG Industrial, you can compare the effects of market volatilities on Simon Property and STAG Industrial 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 STAG Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and STAG Industrial.
Diversification Opportunities for Simon Property and STAG Industrial
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Simon and STAG is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and STAG Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAG Industrial 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 STAG Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STAG Industrial has no effect on the direction of Simon Property i.e., Simon Property and STAG Industrial go up and down completely randomly.
Pair Corralation between Simon Property and STAG Industrial
Considering the 90-day investment horizon Simon Property Group is expected to generate 1.1 times more return on investment than STAG Industrial. However, Simon Property is 1.1 times more volatile than STAG Industrial. It trades about 0.07 of its potential returns per unit of risk. STAG Industrial is currently generating about 0.02 per unit of risk. If you would invest 11,628 in Simon Property Group on August 27, 2024 and sell it today you would earn a total of 6,383 from holding Simon Property Group or generate 54.89% 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. STAG Industrial
Performance |
| Timeline |
| Simon Property Group |
| STAG Industrial |
Simon Property and STAG Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and STAG Industrial
The main advantage of trading using opposite Simon Property and STAG Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, STAG Industrial 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 STAG Industrial will offset losses from the drop in STAG Industrial'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 |
| STAG Industrial vs. Public Storage | STAG Industrial vs. Extra Space Storage | STAG Industrial vs. Rexford Industrial Realty | STAG Industrial vs. Innovative Industrial Properties |
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 Stocks Directory module to find actively traded stocks across global markets.
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