Correlation Between Exxon and SIMON

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

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

Diversification Opportunities for Exxon and SIMON

-0.55

Correlation Coefficient

Exxon  SIMON

Excellent diversification

The 3 months correlation between Exxon and SIMON is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and SIMON PPTY GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIMON PPTY GROUP and Exxon 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 Exxon Mobil Corp are associated (or correlated) with SIMON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIMON PPTY GROUP has no effect on the direction of Exxon i.e., Exxon and SIMON go up and down completely randomly.

Pair Corralation between Exxon and SIMON

Considering the 90-day investment horizon Exxon is expected to generate 9.89 times less return on investment than SIMON. In addition to that, Exxon is 1.25 times more volatile than SIMON PPTY GROUP. It trades about 0.02 of its total potential returns per unit of risk. SIMON PPTY GROUP is currently generating about 0.21 per unit of volatility. If you would invest  8,034  in SIMON PPTY GROUP on May 17, 2025 and sell it today you would earn a total of  564.00  from holding SIMON PPTY GROUP or generate 7.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	51.61%
Values	Daily Returns

Exxon Mobil Corp  vs.  SIMON PPTY GROUP

Exxon Mobil Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Exxon Mobil Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Exxon is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

SIMON PPTY GROUP

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SIMON PPTY GROUP are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, SIMON sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exxon and SIMON

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

The idea behind Exxon Mobil Corp and SIMON PPTY GROUP 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .