Correlation Between Simon Property and Global Ship

Can any of the company-specific risk be diversified away by investing in both Simon Property and Global Ship 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 Global Ship 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 Global Ship Lease, you can compare the effects of market volatilities on Simon Property and Global Ship 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 Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Global Ship.

Diversification Opportunities for Simon Property and Global Ship

0.21

Correlation Coefficient

Simon Property  Global Ship

Modest diversification

The 3 months correlation between Simon and Global is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Global Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ship Lease 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 Global Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ship Lease has no effect on the direction of Simon Property i.e., Simon Property and Global Ship go up and down completely randomly.

Pair Corralation between Simon Property and Global Ship

Considering the 90-day investment horizon Simon Property Group is expected to under-perform the Global Ship. In addition to that, Simon Property is 1.23 times more volatile than Global Ship Lease. It trades about -0.03 of its total potential returns per unit of risk. Global Ship Lease is currently generating about 0.06 per unit of volatility. If you would invest  2,669  in Global Ship Lease on September 12, 2024 and sell it today you would earn a total of  21.00  from holding Global Ship Lease or generate 0.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Simon Property Group  vs.  Global Ship Lease

Simon Property Group

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Simon Property Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Simon Property may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Global Ship Lease

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global Ship Lease are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Global Ship is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Simon Property and Global Ship

The main advantage of trading using opposite Simon Property and Global Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property position performs unexpectedly, Global Ship 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 Global Ship will offset losses from the drop in Global Ship's long position.

The idea behind Simon Property Group and Global Ship Lease 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.