Correlation Between Simon Property and Transport International
Can any of the company-specific risk be diversified away by investing in both Simon Property and Transport International 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 Transport International 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 Transport International Holdings, you can compare the effects of market volatilities on Simon Property and Transport International 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 Transport International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Transport International.
Diversification Opportunities for Simon Property and Transport International
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Simon and Transport is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Transport International Holdin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport International 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 Transport International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport International has no effect on the direction of Simon Property i.e., Simon Property and Transport International go up and down completely randomly.
Pair Corralation between Simon Property and Transport International
Assuming the 90 days horizon Simon Property Group is expected to generate 0.54 times more return on investment than Transport International. However, Simon Property Group is 1.86 times less risky than Transport International. It trades about 0.17 of its potential returns per unit of risk. Transport International Holdings is currently generating about 0.03 per unit of risk. If you would invest 16,495 in Simon Property Group on November 27, 2024 and sell it today you would earn a total of 1,015 from holding Simon Property Group or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Simon Property Group vs. Transport International Holdin
Performance |
| Timeline |
| Simon Property Group |
| Transport International |
Simon Property and Transport International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Transport International
The main advantage of trading using opposite Simon Property and Transport International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Transport International 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 Transport International will offset losses from the drop in Transport International's long position.| Simon Property vs. COFCO Joycome Foods | Simon Property vs. IRONVELD PLC LS | Simon Property vs. ANGANG STEEL H | Simon Property vs. Maple Leaf Foods |
| Transport International vs. FARO TECHNOLOGIES | Transport International vs. Allegheny Technologies Incorporated | Transport International vs. SPARTAN STORES | Transport International vs. Uber Technologies |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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