Correlation Between Simon Property and IAA

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

Diversification Opportunities for Simon Property and IAA

0.35

Correlation Coefficient

Simon Property  IAA

Weak diversification

The 3 months correlation between Simon and IAA is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and IAA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAA Inc 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 IAA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAA Inc has no effect on the direction of Simon Property i.e., Simon Property and IAA go up and down completely randomly.

Pair Corralation between Simon Property and IAA

If you would invest  16,302  in Simon Property Group on September 16, 2024 and sell it today you would earn a total of  1,658  from holding Simon Property Group or generate 10.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

Simon Property Group  vs.  IAA Inc

Simon Property Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Simon Property Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Simon Property may actually be approaching a critical reversion point that can send shares even higher in January 2025.

IAA Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IAA Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, IAA 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 IAA

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

The idea behind Simon Property Group and IAA Inc 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..