Correlation Between National Health and Simon Property
Can any of the company-specific risk be diversified away by investing in both National Health 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 National Health and Simon Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Health Investors and Simon Property Group, you can compare the effects of market volatilities on National Health 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 National Health with a short position of Simon Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and Simon Property.
Diversification Opportunities for National Health and Simon Property
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between National and Simon is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding National Health Investors 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 National Health 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 National Health Investors 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 National Health i.e., National Health and Simon Property go up and down completely randomly.
Pair Corralation between National Health and Simon Property
Assuming the 90 days trading horizon National Health is expected to generate 2.36 times less return on investment than Simon Property. In addition to that, National Health is 1.97 times more volatile than Simon Property Group. It trades about 0.03 of its total potential returns per unit of risk. Simon Property Group is currently generating about 0.14 per unit of volatility. If you would invest 16,390 in Simon Property Group on October 23, 2024 and sell it today you would earn a total of 345.00 from holding Simon Property Group or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
National Health Investors vs. Simon Property Group
Performance |
| Timeline |
| National Health Investors |
| Simon Property Group |
National Health and Simon Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Health and Simon Property
The main advantage of trading using opposite National Health and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health 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.| National Health vs. Gaming and Leisure | National Health vs. NAKED WINES PLC | National Health vs. Zoom Video Communications | National Health vs. UNIVMUSIC GRPADR050 |
| Simon Property vs. National Health Investors | Simon Property vs. WESANA HEALTH HOLD | Simon Property vs. US Physical Therapy | Simon Property vs. Siemens Healthineers AG |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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