Correlation Between SIMON and Aviat Networks

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

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

Diversification Opportunities for SIMON and Aviat Networks

-0.16

Correlation Coefficient

SIMON  Aviat Networks

Good diversification

The 3 months correlation between SIMON and Aviat is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding SIMON PPTY GROUP and Aviat Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aviat Networks and SIMON 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 PPTY GROUP are associated (or correlated) with Aviat Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aviat Networks has no effect on the direction of SIMON i.e., SIMON and Aviat Networks go up and down completely randomly.

Pair Corralation between SIMON and Aviat Networks

Assuming the 90 days trading horizon SIMON PPTY GROUP is expected to generate 0.18 times more return on investment than Aviat Networks. However, SIMON PPTY GROUP is 5.71 times less risky than Aviat Networks. It trades about -0.14 of its potential returns per unit of risk. Aviat Networks is currently generating about -0.03 per unit of risk. If you would invest  9,932  in SIMON PPTY GROUP on July 4, 2025 and sell it today you would lose (431.00) from holding SIMON PPTY GROUP or give up 4.34% of portfolio value over 90 days.

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

SIMON PPTY GROUP  vs.  Aviat Networks

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 somewhat strong basic indicators, SIMON is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aviat Networks

Risk-Adjusted Performance

Weakest

Over the last 90 days Aviat Networks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Aviat Networks is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with SIMON and Aviat Networks

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

The idea behind SIMON PPTY GROUP and Aviat Networks 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.