Correlation Between Agree Realty and Simon Property

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

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

Diversification Opportunities for Agree Realty and Simon Property

-0.45

Correlation Coefficient

Agree Realty  Simon Property

Very good diversification

The 3 months correlation between Agree and Simon is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty 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 Agree Realty 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 Agree Realty 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 Agree Realty i.e., Agree Realty and Simon Property go up and down completely randomly.

Pair Corralation between Agree Realty and Simon Property

Considering the 90-day investment horizon Agree Realty is expected to generate 1.0 times more return on investment than Simon Property. However, Agree Realty is 1.0 times more volatile than Simon Property Group. It trades about 0.1 of its potential returns per unit of risk. Simon Property Group is currently generating about -0.24 per unit of risk. If you would invest  5,659  in Agree Realty on February 2, 2024 and sell it today you would earn a total of  155.00  from holding Agree Realty or generate 2.74% return on investment over 90 days.

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

Agree Realty  vs.  Simon Property Group

Agree Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agree Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Agree Realty is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Simon Property Group

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Simon Property Group are ranked lower than 2 (%) 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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Agree Realty and Simon Property

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

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.