Correlation Between Doman Building and Slate Grocery
Can any of the company-specific risk be diversified away by investing in both Doman Building 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 Doman Building and Slate Grocery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Doman Building Materials and Slate Grocery REIT, you can compare the effects of market volatilities on Doman Building 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 Doman Building with a short position of Slate Grocery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doman Building and Slate Grocery.
Diversification Opportunities for Doman Building and Slate Grocery
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Doman and Slate is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Doman Building Materials 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 Doman Building 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 Doman Building Materials 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 Doman Building i.e., Doman Building and Slate Grocery go up and down completely randomly.
Pair Corralation between Doman Building and Slate Grocery
Assuming the 90 days trading horizon Doman Building Materials is expected to generate 1.05 times more return on investment than Slate Grocery. However, Doman Building is 1.05 times more volatile than Slate Grocery REIT. It trades about 0.47 of its potential returns per unit of risk. Slate Grocery REIT is currently generating about 0.29 per unit of risk. If you would invest 834.00 in Doman Building Materials on September 5, 2024 and sell it today you would earn a total of 153.00 from holding Doman Building Materials or generate 18.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Doman Building Materials vs. Slate Grocery REIT
Performance |
| Timeline |
| Doman Building Materials |
| Slate Grocery REIT |
Doman Building and Slate Grocery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doman Building and Slate Grocery
The main advantage of trading using opposite Doman Building and Slate Grocery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doman Building 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.| Doman Building vs. Alaris Equity Partners | Doman Building vs. Timbercreek Financial Corp | Doman Building vs. Fiera Capital | Doman Building vs. Diversified Royalty Corp |
| Slate Grocery vs. Leveljump Healthcare Corp | Slate Grocery vs. Upstart Investments | Slate Grocery vs. Doman Building Materials | Slate Grocery vs. Brookfield Asset Management |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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