Correlation Between United Guardian and Simon Property
Can any of the company-specific risk be diversified away by investing in both United Guardian and Simon Property 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 United Guardian and Simon Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Guardian and Simon Property Group, you can compare the effects of market volatilities on United Guardian and Simon Property 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 United Guardian with a short position of Simon Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Guardian and Simon Property.
Diversification Opportunities for United Guardian and Simon Property
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Simon is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding United Guardian and Simon Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simon Property Group and United Guardian 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 United Guardian are associated (or correlated) with Simon Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simon Property Group has no effect on the direction of United Guardian i.e., United Guardian and Simon Property go up and down completely randomly.
Pair Corralation between United Guardian and Simon Property
Allowing for the 90-day total investment horizon United Guardian is expected to under-perform the Simon Property. But the stock apears to be less risky and, when comparing its historical volatility, United Guardian is 1.24 times less risky than Simon Property. The stock trades about -0.37 of its potential returns per unit of risk. The Simon Property Group is currently generating about -0.24 of returns per unit of risk over similar time horizon. If you would invest 16,529 in Simon Property Group on January 9, 2025 and sell it today you would lose (2,492) from holding Simon Property Group or give up 15.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Guardian vs. Simon Property Group
Performance |
| Timeline |
| United Guardian |
| Simon Property Group |
United Guardian and Simon Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Guardian and Simon Property
The main advantage of trading using opposite United Guardian and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Guardian position performs unexpectedly, Simon Property 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 Simon Property will offset losses from the drop in Simon Property's long position.| United Guardian vs. Utah Medical Products | United Guardian vs. Union Bankshares | United Guardian vs. Unity Bancorp |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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