Correlation Between Topbuild Corp and SIMON

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

By analyzing existing cross correlation between Topbuild Corp and SIMON PPTY GROUP, you can compare the effects of market volatilities on Topbuild Corp and SIMON 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 Topbuild Corp with a short position of SIMON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Topbuild Corp and SIMON.

Diversification Opportunities for Topbuild Corp and SIMON

-0.48

Correlation Coefficient

Topbuild Corp  SIMON

Very good diversification

The 3 months correlation between Topbuild and SIMON is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Topbuild Corp and SIMON PPTY GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIMON PPTY GROUP and Topbuild Corp 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 Topbuild Corp are associated (or correlated) with SIMON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIMON PPTY GROUP has no effect on the direction of Topbuild Corp i.e., Topbuild Corp and SIMON go up and down completely randomly.

Pair Corralation between Topbuild Corp and SIMON

Considering the 90-day investment horizon Topbuild Corp is expected to generate 3.04 times more return on investment than SIMON. However, Topbuild Corp is 3.04 times more volatile than SIMON PPTY GROUP. It trades about 0.07 of its potential returns per unit of risk. SIMON PPTY GROUP is currently generating about -0.16 per unit of risk. If you would invest  38,719  in Topbuild Corp on August 2, 2025 and sell it today you would earn a total of  3,377  from holding Topbuild Corp or generate 8.72% return on investment over 90 days.

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

Topbuild Corp  vs.  SIMON PPTY GROUP

Topbuild Corp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Topbuild Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating essential indicators, Topbuild Corp may actually be approaching a critical reversion point that can send shares even higher in December 2025.

SIMON PPTY GROUP

Risk-Adjusted Performance

Weakest

Over the last 90 days SIMON PPTY GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for SIMON PPTY GROUP investors.

Pair Trading with Topbuild Corp and SIMON

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

The idea behind Topbuild Corp and SIMON PPTY 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 CEOs Directory module to screen CEOs from public companies around the world.