Correlation Between BROADSTNET LEADL and Simon Property

Can any of the company-specific risk be diversified away by investing in both BROADSTNET LEADL 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 BROADSTNET LEADL and Simon Property into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BROADSTNET LEADL 00025 and Simon Property Group, you can compare the effects of market volatilities on BROADSTNET LEADL 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 BROADSTNET LEADL with a short position of Simon Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROADSTNET LEADL and Simon Property.

Diversification Opportunities for BROADSTNET LEADL and Simon Property

-0.19

Correlation Coefficient

BROADSTNET LEADL  Simon Property

Good diversification

The 3 months correlation between BROADSTNET and Simon is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding BROADSTNET LEADL 00025 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 BROADSTNET LEADL 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 BROADSTNET LEADL 00025 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 BROADSTNET LEADL i.e., BROADSTNET LEADL and Simon Property go up and down completely randomly.

Pair Corralation between BROADSTNET LEADL and Simon Property

Assuming the 90 days trading horizon BROADSTNET LEADL is expected to generate 61.18 times less return on investment than Simon Property. But when comparing it to its historical volatility, BROADSTNET LEADL 00025 is 1.04 times less risky than Simon Property. It trades about 0.0 of its potential returns per unit of risk. Simon Property Group is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  14,451  in Simon Property Group on September 12, 2024 and sell it today you would earn a total of  2,639  from holding Simon Property Group or generate 18.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BROADSTNET LEADL 00025  vs.  Simon Property Group

BROADSTNET LEADL 00025

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BROADSTNET LEADL 00025 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, BROADSTNET LEADL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Simon Property Group

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Simon Property Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Simon Property reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BROADSTNET LEADL and Simon Property

The main advantage of trading using opposite BROADSTNET LEADL and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BROADSTNET LEADL 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.

The idea behind BROADSTNET LEADL 00025 and Simon Property Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.