Correlation Between Simon Property and Klpierre

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

Diversification Opportunities for Simon Property and Klpierre

-0.68

Correlation Coefficient

Simon Property  Klpierre

Excellent diversification

The 3 months correlation between Simon and Klpierre is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Klpierre SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klpierre SA 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 Klpierre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klpierre SA has no effect on the direction of Simon Property i.e., Simon Property and Klpierre go up and down completely randomly.

Pair Corralation between Simon Property and Klpierre

Assuming the 90 days horizon Simon Property Group is expected to generate 1.54 times more return on investment than Klpierre. However, Simon Property is 1.54 times more volatile than Klpierre SA. It trades about 0.12 of its potential returns per unit of risk. Klpierre SA is currently generating about -0.14 per unit of risk. If you would invest  14,688  in Simon Property Group on September 23, 2024 and sell it today you would earn a total of  1,492  from holding Simon Property Group or generate 10.16% return on investment over 90 days.

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

Simon Property Group  vs.  Klpierre SA

Simon Property Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Simon Property Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Simon Property may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Klpierre SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Klpierre SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Simon Property and Klpierre

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

The idea behind Simon Property Group and Klpierre SA 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.