Correlation Between Simon Property and Getty Realty

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

Diversification Opportunities for Simon Property and Getty Realty

0.25

Correlation Coefficient

Simon Property  Getty Realty

Modest diversification

The 3 months correlation between Simon and Getty is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Getty Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Realty 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 Getty Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Realty has no effect on the direction of Simon Property i.e., Simon Property and Getty Realty go up and down completely randomly.

Pair Corralation between Simon Property and Getty Realty

Considering the 90-day investment horizon Simon Property Group is expected to under-perform the Getty Realty. In addition to that, Simon Property is 1.26 times more volatile than Getty Realty. It trades about 0.0 of its total potential returns per unit of risk. Getty Realty is currently generating about 0.05 per unit of volatility. If you would invest  2,981  in Getty Realty on December 27, 2024 and sell it today you would earn a total of  99.00  from holding Getty Realty or generate 3.32% 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.  Getty Realty

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. Despite nearly stable basic indicators, Simon Property is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Getty Realty

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Getty Realty are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Getty Realty is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Simon Property and Getty Realty

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

The idea behind Simon Property Group and Getty Realty 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.