Correlation Between Simon Property and Meiwu Technology

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

Diversification Opportunities for Simon Property and Meiwu Technology

0.23

Correlation Coefficient

Simon Property  Meiwu Technology

Modest diversification

The 3 months correlation between Simon and Meiwu is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Meiwu Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiwu Technology 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 Meiwu Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiwu Technology has no effect on the direction of Simon Property i.e., Simon Property and Meiwu Technology go up and down completely randomly.

Pair Corralation between Simon Property and Meiwu Technology

Considering the 90-day investment horizon Simon Property is expected to generate 1.94 times less return on investment than Meiwu Technology. But when comparing it to its historical volatility, Simon Property Group is 4.41 times less risky than Meiwu Technology. It trades about 0.18 of its potential returns per unit of risk. Meiwu Technology Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  81.00  in Meiwu Technology Co on September 5, 2024 and sell it today you would earn a total of  14.00  from holding Meiwu Technology Co or generate 17.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Simon Property Group  vs.  Meiwu Technology Co

Simon Property Group

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Simon Property Group are ranked lower than 14 (%) 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.

Meiwu Technology

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Meiwu Technology Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Meiwu Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Simon Property and Meiwu Technology

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

The idea behind Simon Property Group and Meiwu Technology Co 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.