Correlation Between Simon Property and Ioneer

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

Diversification Opportunities for Simon Property and Ioneer

-0.4

Correlation Coefficient

Simon Property  Ioneer

Very good diversification

The 3 months correlation between Simon and Ioneer is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and ioneer Ltd American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ioneer American 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 Ioneer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ioneer American has no effect on the direction of Simon Property i.e., Simon Property and Ioneer go up and down completely randomly.

Pair Corralation between Simon Property and Ioneer

Considering the 90-day investment horizon Simon Property is expected to generate 2.14 times less return on investment than Ioneer. But when comparing it to its historical volatility, Simon Property Group is 3.69 times less risky than Ioneer. It trades about 0.09 of its potential returns per unit of risk. ioneer Ltd American is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  315.00  in ioneer Ltd American on October 7, 2024 and sell it today you would earn a total of  106.00  from holding ioneer Ltd American or generate 33.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.56%
Values	Daily Returns

Simon Property Group  vs.  ioneer Ltd American

Simon Property Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Simon Property Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Simon Property may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ioneer American

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ioneer Ltd American has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Simon Property and Ioneer

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

The idea behind Simon Property Group and ioneer Ltd American 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.