Correlation Between Simon Property and Western Sierra
Can any of the company-specific risk be diversified away by investing in both Simon Property and Western Sierra 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 Western Sierra 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 Western Sierra Mining, you can compare the effects of market volatilities on Simon Property and Western Sierra 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 Western Sierra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Western Sierra.
Diversification Opportunities for Simon Property and Western Sierra
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Simon and Western is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Western Sierra Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Sierra Mining 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 Western Sierra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Sierra Mining has no effect on the direction of Simon Property i.e., Simon Property and Western Sierra go up and down completely randomly.
Pair Corralation between Simon Property and Western Sierra
Considering the 90-day investment horizon Simon Property is expected to generate 84.52 times less return on investment than Western Sierra. But when comparing it to its historical volatility, Simon Property Group is 70.75 times less risky than Western Sierra. It trades about 0.08 of its potential returns per unit of risk. Western Sierra Mining is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Western Sierra Mining on August 26, 2024 and sell it today you would lose (13.32) from holding Western Sierra Mining or give up 95.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. Western Sierra Mining
Performance |
| Timeline |
| Simon Property Group |
| Western Sierra Mining |
Simon Property and Western Sierra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Western Sierra
The main advantage of trading using opposite Simon Property and Western Sierra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Western Sierra 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 Western Sierra will offset losses from the drop in Western Sierra's long position.| Simon Property vs. Site Centers Corp | Simon Property vs. Inventrust Properties Corp | Simon Property vs. Retail Opportunity Investments | Simon Property vs. Netstreit Corp |
| Western Sierra vs. Green Cures Botanical | Western Sierra vs. Galexxy Holdings | Western Sierra vs. Indoor Harvest Corp | Western Sierra vs. Speakeasy Cannabis Club |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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