Correlation Between Simon Property and MeVis Medical
Can any of the company-specific risk be diversified away by investing in both Simon Property and MeVis Medical 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 MeVis Medical 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 MeVis Medical Solutions, you can compare the effects of market volatilities on Simon Property and MeVis Medical 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 MeVis Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and MeVis Medical.
Diversification Opportunities for Simon Property and MeVis Medical
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Simon and MeVis is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and MeVis Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MeVis Medical Solutions 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 MeVis Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MeVis Medical Solutions has no effect on the direction of Simon Property i.e., Simon Property and MeVis Medical go up and down completely randomly.
Pair Corralation between Simon Property and MeVis Medical
Assuming the 90 days horizon Simon Property Group is expected to generate 1.01 times more return on investment than MeVis Medical. However, Simon Property is 1.01 times more volatile than MeVis Medical Solutions. It trades about 0.13 of its potential returns per unit of risk. MeVis Medical Solutions is currently generating about -0.04 per unit of risk. If you would invest 9,687 in Simon Property Group on September 12, 2024 and sell it today you would earn a total of 7,403 from holding Simon Property Group or generate 76.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. MeVis Medical Solutions
Performance |
| Timeline |
| Simon Property Group |
| MeVis Medical Solutions |
Simon Property and MeVis Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and MeVis Medical
The main advantage of trading using opposite Simon Property and MeVis Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, MeVis Medical 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 MeVis Medical will offset losses from the drop in MeVis Medical's long position.| Simon Property vs. Air Transport Services | Simon Property vs. BROADSTNET LEADL 00025 | Simon Property vs. International Game Technology | Simon Property vs. Gaztransport Technigaz SA |
| MeVis Medical vs. UNITED UTILITIES GR | MeVis Medical vs. LION ONE METALS | MeVis Medical vs. COMMERCIAL VEHICLE | MeVis Medical vs. GEELY AUTOMOBILE |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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