Correlation Between Automotive Finco and Slate Grocery
Can any of the company-specific risk be diversified away by investing in both Automotive Finco and Slate Grocery 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 Automotive Finco and Slate Grocery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automotive Finco Corp and Slate Grocery REIT, you can compare the effects of market volatilities on Automotive Finco and Slate Grocery 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 Automotive Finco with a short position of Slate Grocery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automotive Finco and Slate Grocery.
Diversification Opportunities for Automotive Finco and Slate Grocery
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Automotive and Slate is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Automotive Finco Corp and Slate Grocery REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slate Grocery REIT and Automotive Finco 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 Automotive Finco Corp are associated (or correlated) with Slate Grocery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slate Grocery REIT has no effect on the direction of Automotive Finco i.e., Automotive Finco and Slate Grocery go up and down completely randomly.
Pair Corralation between Automotive Finco and Slate Grocery
Assuming the 90 days trading horizon Automotive Finco Corp is expected to generate 3.28 times more return on investment than Slate Grocery. However, Automotive Finco is 3.28 times more volatile than Slate Grocery REIT. It trades about 0.01 of its potential returns per unit of risk. Slate Grocery REIT is currently generating about 0.02 per unit of risk. If you would invest 147.00 in Automotive Finco Corp on September 12, 2024 and sell it today you would lose (61.00) from holding Automotive Finco Corp or give up 41.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automotive Finco Corp vs. Slate Grocery REIT
Performance |
| Timeline |
| Automotive Finco Corp |
| Slate Grocery REIT |
Automotive Finco and Slate Grocery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automotive Finco and Slate Grocery
The main advantage of trading using opposite Automotive Finco and Slate Grocery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automotive Finco position performs unexpectedly, Slate Grocery 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 Slate Grocery will offset losses from the drop in Slate Grocery's long position.| Automotive Finco vs. Dream Industrial Real | Automotive Finco vs. Boat Rocker Media | Automotive Finco vs. Network Media Group | Automotive Finco vs. Gfl Environmental Holdings |
| Slate Grocery vs. InterRent Real Estate | Slate Grocery vs. Canadian Apartment Properties | Slate Grocery vs. Granite Real Estate | Slate Grocery vs. Crombie Real Estate |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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