Correlation Between British Land and Simon Property
Can any of the company-specific risk be diversified away by investing in both British Land 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 British Land and Simon Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between British Land and Simon Property Group, you can compare the effects of market volatilities on British Land 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 British Land with a short position of Simon Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Land and Simon Property.
Diversification Opportunities for British Land and Simon Property
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between British and Simon is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding British Land 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 British Land 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 British Land 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 British Land i.e., British Land and Simon Property go up and down completely randomly.
Pair Corralation between British Land and Simon Property
Assuming the 90 days horizon British Land is expected to under-perform the Simon Property. In addition to that, British Land is 1.37 times more volatile than Simon Property Group. It trades about -0.01 of its total potential returns per unit of risk. Simon Property Group is currently generating about 0.05 per unit of volatility. If you would invest 10,139 in Simon Property Group on January 20, 2024 and sell it today you would earn a total of 3,898 from holding Simon Property Group or generate 38.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
British Land vs. Simon Property Group
Performance |
| Timeline |
| British Land |
| Simon Property Group |
British Land and Simon Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Land and Simon Property
The main advantage of trading using opposite British Land and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Land 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.| British Land vs. VICI Properties | British Land vs. Fibra UNO | British Land vs. Global Net Lease | British Land vs. Highlands REIT |
| Simon Property vs. Douglas Emmett | Simon Property vs. Vornado Realty Trust | Simon Property vs. Highwoods Properties | Simon Property vs. Hudson Pacific Properties |
Check out your portfolio center.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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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