Correlation Between Simon Property and ATRenew

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

Diversification Opportunities for Simon Property and ATRenew

0.52

Correlation Coefficient

Simon Property  ATRenew

Very weak diversification

The 3 months correlation between Simon and ATRenew is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and ATRenew Inc DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRenew Inc DRC 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 ATRenew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRenew Inc DRC has no effect on the direction of Simon Property i.e., Simon Property and ATRenew go up and down completely randomly.

Pair Corralation between Simon Property and ATRenew

Considering the 90-day investment horizon Simon Property is expected to generate 3.69 times less return on investment than ATRenew. But when comparing it to its historical volatility, Simon Property Group is 3.52 times less risky than ATRenew. It trades about 0.05 of its potential returns per unit of risk. ATRenew Inc DRC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  280.00  in ATRenew Inc DRC on November 20, 2024 and sell it today you would earn a total of  26.00  from holding ATRenew Inc DRC or generate 9.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Simon Property Group  vs.  ATRenew Inc DRC

Simon Property Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Simon Property Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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.

ATRenew Inc DRC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ATRenew Inc DRC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, ATRenew exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Simon Property and ATRenew

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

The idea behind Simon Property Group and ATRenew Inc DRC 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.