Correlation Between Simon Property and Roblox Corp

Can any of the company-specific risk be diversified away by investing in both Simon Property and Roblox Corp 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 Roblox Corp 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 Roblox Corp, you can compare the effects of market volatilities on Simon Property and Roblox Corp 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 Roblox Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Roblox Corp.

Diversification Opportunities for Simon Property and Roblox Corp

0.24

Correlation Coefficient

Simon Property  Roblox Corp

Modest diversification

The 3 months correlation between Simon and Roblox is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Roblox Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roblox Corp 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 Roblox Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roblox Corp has no effect on the direction of Simon Property i.e., Simon Property and Roblox Corp go up and down completely randomly.

Pair Corralation between Simon Property and Roblox Corp

Assuming the 90 days trading horizon Simon Property is expected to generate 14.91 times less return on investment than Roblox Corp. But when comparing it to its historical volatility, Simon Property Group is 2.2 times less risky than Roblox Corp. It trades about 0.07 of its potential returns per unit of risk. Roblox Corp is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest  5,731  in Roblox Corp on February 8, 2025 and sell it today you would earn a total of  1,457  from holding Roblox Corp or generate 25.42% return on investment over 90 days.

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

Simon Property Group  vs.  Roblox Corp

Simon Property Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Simon Property Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively steady technical and fundamental indicators, Simon Property is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Roblox Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Roblox Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Roblox Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Simon Property and Roblox Corp

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

The idea behind Simon Property Group and Roblox Corp 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.