Correlation Between Modine Manufacturing and SIMON

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

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

Diversification Opportunities for Modine Manufacturing and SIMON

0.05

Correlation Coefficient

Modine Manufacturing  SIMON

Significant diversification

The 3 months correlation between Modine and SIMON is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing 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 Modine Manufacturing 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 Modine Manufacturing 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 PROPERTY GROUP has no effect on the direction of Modine Manufacturing i.e., Modine Manufacturing and SIMON go up and down completely randomly.

Pair Corralation between Modine Manufacturing and SIMON

Considering the 90-day investment horizon Modine Manufacturing is expected to generate 2.73 times more return on investment than SIMON. However, Modine Manufacturing is 2.73 times more volatile than SIMON PROPERTY GROUP. It trades about 0.15 of its potential returns per unit of risk. SIMON PROPERTY GROUP is currently generating about -0.1 per unit of risk. If you would invest  10,453  in Modine Manufacturing on May 16, 2025 and sell it today you would earn a total of  3,759  from holding Modine Manufacturing or generate 35.96% return on investment over 90 days.

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

Modine Manufacturing  vs.  SIMON PROPERTY GROUP

Modine Manufacturing

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Modine Manufacturing are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Modine Manufacturing exhibited solid returns over the last few months and may actually be approaching a breakup point.

SIMON PROPERTY GROUP

Risk-Adjusted Performance

Weakest

Over the last 90 days SIMON PROPERTY GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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 PROPERTY GROUP investors.

Pair Trading with Modine Manufacturing and SIMON

The main advantage of trading using opposite Modine Manufacturing and SIMON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modine Manufacturing 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 Modine Manufacturing 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 Global Correlations module to find global opportunities by holding instruments from different markets.