Correlation Between Simon Property and Tejon Ranch
Can any of the company-specific risk be diversified away by investing in both Simon Property and Tejon Ranch 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 Tejon Ranch 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 Tejon Ranch Co, you can compare the effects of market volatilities on Simon Property and Tejon Ranch 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 Tejon Ranch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Tejon Ranch.
Diversification Opportunities for Simon Property and Tejon Ranch
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Simon and Tejon is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Tejon Ranch Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tejon Ranch 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 Tejon Ranch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tejon Ranch has no effect on the direction of Simon Property i.e., Simon Property and Tejon Ranch go up and down completely randomly.
Pair Corralation between Simon Property and Tejon Ranch
Considering the 90-day investment horizon Simon Property Group is expected to generate 0.37 times more return on investment than Tejon Ranch. However, Simon Property Group is 2.71 times less risky than Tejon Ranch. It trades about 0.19 of its potential returns per unit of risk. Tejon Ranch Co is currently generating about 0.05 per unit of risk. If you would invest 17,252 in Simon Property Group on August 28, 2024 and sell it today you would earn a total of 759.00 from holding Simon Property Group or generate 4.4% 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. Tejon Ranch Co
Performance |
| Timeline |
| Simon Property Group |
| Tejon Ranch |
Simon Property and Tejon Ranch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Tejon Ranch
The main advantage of trading using opposite Simon Property and Tejon Ranch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Tejon Ranch 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 Tejon Ranch will offset losses from the drop in Tejon Ranch'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 |
| Tejon Ranch vs. Steel Partners Holdings | Tejon Ranch vs. Compass Diversified | Tejon Ranch vs. Brookfield Business Partners | Tejon Ranch vs. Matthews International |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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