Correlation Between FitLife Brands, and SIMON

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

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

Diversification Opportunities for FitLife Brands, and SIMON

0.34

Correlation Coefficient

FitLife Brands,  SIMON

Weak diversification

The 3 months correlation between FitLife and SIMON is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common 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 FitLife Brands, 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 FitLife Brands, Common 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 FitLife Brands, i.e., FitLife Brands, and SIMON go up and down completely randomly.

Pair Corralation between FitLife Brands, and SIMON

Given the investment horizon of 90 days FitLife Brands, Common is expected to generate 4.08 times more return on investment than SIMON. However, FitLife Brands, is 4.08 times more volatile than SIMON PPTY GROUP. It trades about 0.06 of its potential returns per unit of risk. SIMON PPTY GROUP is currently generating about 0.01 per unit of risk. If you would invest  2,450  in FitLife Brands, Common on October 25, 2024 and sell it today you would earn a total of  714.00  from holding FitLife Brands, Common or generate 29.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	77.45%
Values	Daily Returns

FitLife Brands, Common  vs.  SIMON PPTY GROUP

FitLife Brands, Common

Risk-Adjusted Performance

0 of 100

Very Weak

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

SIMON PPTY GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SIMON PPTY 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.

Pair Trading with FitLife Brands, and SIMON

The main advantage of trading using opposite FitLife Brands, and SIMON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FitLife Brands, 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 FitLife Brands, Common 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.