Correlation Between Powell Max and Simon Property

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

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

Diversification Opportunities for Powell Max and Simon Property

0.27

Correlation Coefficient

Powell Max  Simon Property

Modest diversification

The 3 months correlation between Powell and Simon is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Powell Max Limited 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 Powell Max 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 Powell Max Limited 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 Powell Max i.e., Powell Max and Simon Property go up and down completely randomly.

Pair Corralation between Powell Max and Simon Property

Given the investment horizon of 90 days Powell Max Limited is expected to under-perform the Simon Property. In addition to that, Powell Max is 10.5 times more volatile than Simon Property Group. It trades about -0.2 of its total potential returns per unit of risk. Simon Property Group is currently generating about 0.01 per unit of volatility. If you would invest  5,806  in Simon Property Group on December 21, 2024 and sell it today you would earn a total of  6.00  from holding Simon Property Group or generate 0.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Powell Max Limited  vs.  Simon Property Group

Powell Max Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Powell Max Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Simon Property Group

Risk-Adjusted Performance

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 Powell Max and Simon Property

The main advantage of trading using opposite Powell Max and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Powell Max 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 Powell Max Limited 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.