Correlation Between SIMON and Tandy Leather

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

Diversification Opportunities for SIMON and Tandy Leather

0.43

Correlation Coefficient

SIMON  Tandy Leather

Very weak diversification

The 3 months correlation between SIMON and Tandy is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding SIMON PPTY GROUP and Tandy Leather Factory in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tandy Leather Factory 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 Tandy Leather. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tandy Leather Factory has no effect on the direction of SIMON i.e., SIMON and Tandy Leather go up and down completely randomly.

Pair Corralation between SIMON and Tandy Leather

Assuming the 90 days trading horizon SIMON PPTY GROUP is expected to generate 0.52 times more return on investment than Tandy Leather. However, SIMON PPTY GROUP is 1.93 times less risky than Tandy Leather. It trades about -0.15 of its potential returns per unit of risk. Tandy Leather Factory is currently generating about -0.1 per unit of risk. If you would invest  9,826  in SIMON PPTY GROUP on July 15, 2025 and sell it today you would lose (672.00) from holding SIMON PPTY GROUP or give up 6.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

SIMON PPTY GROUP  vs.  Tandy Leather Factory

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 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 PPTY GROUP investors.

Tandy Leather Factory

Risk-Adjusted Performance

Weakest

Over the last 90 days Tandy Leather Factory has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with SIMON and Tandy Leather

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

The idea behind SIMON PPTY GROUP and Tandy Leather Factory 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..