Correlation Between Granite Real and Slate Grocery
Can any of the company-specific risk be diversified away by investing in both Granite Real 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 Granite Real and Slate Grocery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Real Estate and Slate Grocery REIT, you can compare the effects of market volatilities on Granite Real 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 Granite Real with a short position of Slate Grocery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Real and Slate Grocery.
Diversification Opportunities for Granite Real and Slate Grocery
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Granite and Slate is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Granite Real Estate 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 Granite Real 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 Granite Real Estate 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 Granite Real i.e., Granite Real and Slate Grocery go up and down completely randomly.
Pair Corralation between Granite Real and Slate Grocery
Assuming the 90 days trading horizon Granite Real Estate is expected to under-perform the Slate Grocery. But the stock apears to be less risky and, when comparing its historical volatility, Granite Real Estate is 1.65 times less risky than Slate Grocery. The stock trades about -0.2 of its potential returns per unit of risk. The Slate Grocery REIT is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 995.00 in Slate Grocery REIT on September 13, 2024 and sell it today you would earn a total of 30.00 from holding Slate Grocery REIT or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Real Estate vs. Slate Grocery REIT
Performance |
| Timeline |
| Granite Real Estate |
| Slate Grocery REIT |
Granite Real and Slate Grocery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Real and Slate Grocery
The main advantage of trading using opposite Granite Real and Slate Grocery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Real 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.| Granite Real vs. Canadian Apartment Properties | Granite Real vs. Choice Properties Real | Granite Real vs. HR Real Estate | Granite Real vs. Boardwalk Real Estate |
| Slate Grocery vs. Slate Office REIT | Slate Grocery vs. Automotive Properties Real | Slate Grocery vs. BTB Real Estate | Slate Grocery vs. iShares Canadian HYBrid |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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