Correlation Between InfuSystems Holdings and Simon Property

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

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

Diversification Opportunities for InfuSystems Holdings and Simon Property

-0.05

Correlation Coefficient

InfuSystems Holdings  Simon Property

Good diversification

The 3 months correlation between InfuSystems and Simon is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding InfuSystems Holdings 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 InfuSystems Holdings 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 InfuSystems Holdings 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 InfuSystems Holdings i.e., InfuSystems Holdings and Simon Property go up and down completely randomly.

Pair Corralation between InfuSystems Holdings and Simon Property

Given the investment horizon of 90 days InfuSystems Holdings is expected to under-perform the Simon Property. In addition to that, InfuSystems Holdings is 2.48 times more volatile than Simon Property Group. It trades about 0.0 of its total potential returns per unit of risk. Simon Property Group is currently generating about 0.03 per unit of volatility. If you would invest  5,022  in Simon Property Group on October 26, 2024 and sell it today you would earn a total of  978.00  from holding Simon Property Group or generate 19.47% return on investment over 90 days.

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

InfuSystems Holdings  vs.  Simon Property Group

InfuSystems Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in InfuSystems Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, InfuSystems Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Simon Property Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Simon Property Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady technical and fundamental indicators, Simon Property is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with InfuSystems Holdings and Simon Property

The main advantage of trading using opposite InfuSystems Holdings and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfuSystems Holdings 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 InfuSystems Holdings 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.