Correlation Between Simon Property and Public Storage

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

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

Diversification Opportunities for Simon Property and Public Storage

-0.34

Correlation Coefficient

Simon Property  Public Storage

Very good diversification

The 3 months correlation between Simon and Public is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage and Simon Property 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 Simon Property Group are associated (or correlated) with Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of Simon Property i.e., Simon Property and Public Storage go up and down completely randomly.

Pair Corralation between Simon Property and Public Storage

Assuming the 90 days trading horizon Simon Property Group is expected to under-perform the Public Storage. In addition to that, Simon Property is 1.58 times more volatile than Public Storage. It trades about -0.1 of its total potential returns per unit of risk. Public Storage is currently generating about 0.04 per unit of volatility. If you would invest  2,031  in Public Storage on May 6, 2025 and sell it today you would earn a total of  32.00  from holding Public Storage or generate 1.58% return on investment over 90 days.

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

Simon Property Group  vs.  Public Storage

Simon Property Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Simon Property Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Preferred Stock's technical and fundamental indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

Public Storage

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Public Storage are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Public Storage is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Simon Property and Public Storage

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

The idea behind Simon Property Group and Public Storage 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.