Correlation Between Simon Property and Whole Foods

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

Diversification Opportunities for Simon Property and Whole Foods

0.0

Correlation Coefficient

Simon Property  Whole Foods

Pay attention - limited upside

The 3 months correlation between Simon and Whole is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group and Whole Foods Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whole Foods Market 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 Whole Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whole Foods Market has no effect on the direction of Simon Property i.e., Simon Property and Whole Foods go up and down completely randomly.

Pair Corralation between Simon Property and Whole Foods

If you would invest  9,831  in Simon Property Group on February 21, 2024 and sell it today you would earn a total of  4,806  from holding Simon Property Group or generate 48.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Simon Property Group  vs.  Whole Foods Market

Simon Property Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Simon Property Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Simon Property is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Whole Foods Market

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Whole Foods Market has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Whole Foods is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Simon Property and Whole Foods

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

The idea behind Simon Property Group and Whole Foods Market 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.