Correlation Between SIMON and Modine Manufacturing

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

Diversification Opportunities for SIMON and Modine Manufacturing

-0.67

Correlation Coefficient

SIMON  Modine Manufacturing

Excellent diversification

The 3 months correlation between SIMON and Modine is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding SIMON PROPERTY GROUP and Modine Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modine Manufacturing 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 PROPERTY GROUP are associated (or correlated) with Modine Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Modine Manufacturing has no effect on the direction of SIMON i.e., SIMON and Modine Manufacturing go up and down completely randomly.

Pair Corralation between SIMON and Modine Manufacturing

Assuming the 90 days trading horizon SIMON PROPERTY GROUP is expected to under-perform the Modine Manufacturing. But the bond apears to be less risky and, when comparing its historical volatility, SIMON PROPERTY GROUP is 2.4 times less risky than Modine Manufacturing. The bond trades about -0.03 of its potential returns per unit of risk. The Modine Manufacturing is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  10,508  in Modine Manufacturing on May 14, 2025 and sell it today you would earn a total of  2,898  from holding Modine Manufacturing or generate 27.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

SIMON PROPERTY GROUP  vs.  Modine Manufacturing

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

Modine Manufacturing

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Modine Manufacturing are ranked lower than 9 (%) 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.

Pair Trading with SIMON and Modine Manufacturing

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

The idea behind SIMON PROPERTY GROUP and Modine Manufacturing 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.