Correlation Between Western Energy and Simon Property

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Can any of the company-specific risk be diversified away by investing in both Western Energy 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 Western Energy and Simon Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Energy Services and Simon Property Group, you can compare the effects of market volatilities on Western Energy 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 Western Energy with a short position of Simon Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Energy and Simon Property.

Diversification Opportunities for Western Energy and Simon Property

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Western and Simon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Western Energy Services 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 Western Energy 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 Western Energy Services 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 Western Energy i.e., Western Energy and Simon Property go up and down completely randomly.

Pair Corralation between Western Energy and Simon Property

If you would invest  6,054  in Simon Property Group on December 29, 2023 and sell it today you would earn a total of  49.00  from holding Simon Property Group or generate 0.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Western Energy Services  vs.  Simon Property Group

 Performance 
       Timeline  
Western Energy Services 

Risk-Adjusted Performance

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Weak
Over the last 90 days Western Energy Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Western Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Simon Property Group 

Risk-Adjusted Performance

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Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Simon Property Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, Simon Property may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Western Energy and Simon Property Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Western Energy and Simon Property

The main advantage of trading using opposite Western Energy and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Energy 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 Western Energy Services 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.
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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