Correlation Between Latamgrowth SPAC and Simon Property

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

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

Diversification Opportunities for Latamgrowth SPAC and Simon Property

-0.53

Correlation Coefficient

Latamgrowth SPAC  Simon Property

Excellent diversification

The 3 months correlation between Latamgrowth and Simon is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Latamgrowth SPAC Unit 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 Latamgrowth SPAC 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 Latamgrowth SPAC Unit 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 Latamgrowth SPAC i.e., Latamgrowth SPAC and Simon Property go up and down completely randomly.

Pair Corralation between Latamgrowth SPAC and Simon Property

Assuming the 90 days horizon Latamgrowth SPAC Unit is expected to generate 5.95 times more return on investment than Simon Property. However, Latamgrowth SPAC is 5.95 times more volatile than Simon Property Group. It trades about 0.02 of its potential returns per unit of risk. Simon Property Group is currently generating about -0.06 per unit of risk. If you would invest  1,163  in Latamgrowth SPAC Unit on October 26, 2024 and sell it today you would lose (18.00) from holding Latamgrowth SPAC Unit or give up 1.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	89.74%
Values	Daily Returns

Latamgrowth SPAC Unit  vs.  Simon Property Group

Latamgrowth SPAC Unit

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Latamgrowth SPAC Unit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively unsteady technical and fundamental indicators, Latamgrowth SPAC may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 Latamgrowth SPAC and Simon Property

The main advantage of trading using opposite Latamgrowth SPAC and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Latamgrowth SPAC 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 Latamgrowth SPAC Unit 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.