Correlation Between E L and Slate Grocery
Can any of the company-specific risk be diversified away by investing in both E L 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 E L and Slate Grocery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E L Financial 3 and Slate Grocery REIT, you can compare the effects of market volatilities on E L 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 E L with a short position of Slate Grocery. Check out your portfolio center. Please also check ongoing floating volatility patterns of E L and Slate Grocery.
Diversification Opportunities for E L and Slate Grocery
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ELF-PH and Slate is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding E L Financial 3 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 E L 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 E L Financial 3 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 E L i.e., E L and Slate Grocery go up and down completely randomly.
Pair Corralation between E L and Slate Grocery
Assuming the 90 days trading horizon E L Financial 3 is expected to generate 0.41 times more return on investment than Slate Grocery. However, E L Financial 3 is 2.44 times less risky than Slate Grocery. It trades about 0.06 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 1,848 in E L Financial 3 on August 25, 2024 and sell it today you would earn a total of 369.00 from holding E L Financial 3 or generate 19.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
E L Financial 3 vs. Slate Grocery REIT
Performance |
| Timeline |
| E L Financial |
| Slate Grocery REIT |
E L and Slate Grocery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E L and Slate Grocery
The main advantage of trading using opposite E L and Slate Grocery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E L 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.| E L vs. Fairfax Financial Holdings | E L vs. Fairfax Financial Holdings | E L vs. Fairfax Financial Holdings | E L vs. Fairfax Financial Holdings |
| Slate Grocery vs. Berkshire Hathaway CDR | Slate Grocery vs. E L Financial Corp | Slate Grocery vs. E L Financial 3 | Slate Grocery vs. Molson Coors Canada |
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 CEOs Directory module to screen CEOs from public companies around the world.
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