Correlation Between Astral Foods and Simon Property

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

By analyzing existing cross correlation between Astral Foods Limited and Simon Property Group, you can compare the effects of market volatilities on Astral Foods and Simon Property 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 Astral Foods with a short position of Simon Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and Simon Property.

Diversification Opportunities for Astral Foods and Simon Property

-0.15

Correlation Coefficient

Astral Foods  Simon Property

Good diversification

The 3 months correlation between Astral and Simon is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods Limited and Simon Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simon Property Group and Astral Foods 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 Astral Foods Limited are associated (or correlated) with Simon Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simon Property Group has no effect on the direction of Astral Foods i.e., Astral Foods and Simon Property go up and down completely randomly.

Pair Corralation between Astral Foods and Simon Property

Assuming the 90 days horizon Astral Foods Limited is expected to generate 0.24 times more return on investment than Simon Property. However, Astral Foods Limited is 4.22 times less risky than Simon Property. It trades about 0.07 of its potential returns per unit of risk. Simon Property Group is currently generating about 0.02 per unit of risk. If you would invest  710.00  in Astral Foods Limited on October 25, 2024 and sell it today you would earn a total of  29.00  from holding Astral Foods Limited or generate 4.08% return on investment over 90 days.

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

Astral Foods Limited  vs.  Simon Property Group

Astral Foods Limited

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Astral Foods Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Astral Foods is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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. Even with relatively steady technical and fundamental indicators, Simon Property is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Astral Foods and Simon Property

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

The idea behind Astral Foods Limited and Simon Property 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.