Correlation Between Slate Office and Allied Properties
Can any of the company-specific risk be diversified away by investing in both Slate Office and Allied Properties 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 Slate Office and Allied Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Slate Office REIT and Allied Properties Real, you can compare the effects of market volatilities on Slate Office and Allied Properties 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 Slate Office with a short position of Allied Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Slate Office and Allied Properties.
Diversification Opportunities for Slate Office and Allied Properties
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Slate and Allied is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Slate Office REIT and Allied Properties Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Properties Real and Slate Office 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 Slate Office REIT are associated (or correlated) with Allied Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Properties Real has no effect on the direction of Slate Office i.e., Slate Office and Allied Properties go up and down completely randomly.
Pair Corralation between Slate Office and Allied Properties
Assuming the 90 days horizon Slate Office REIT is expected to generate 2.75 times more return on investment than Allied Properties. However, Slate Office is 2.75 times more volatile than Allied Properties Real. It trades about 0.1 of its potential returns per unit of risk. Allied Properties Real is currently generating about -0.05 per unit of risk. If you would invest 38.00 in Slate Office REIT on November 5, 2024 and sell it today you would earn a total of 3.00 from holding Slate Office REIT or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Slate Office REIT vs. Allied Properties Real
Performance |
| Timeline |
| Slate Office REIT |
| Allied Properties Real |
Slate Office and Allied Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Slate Office and Allied Properties
The main advantage of trading using opposite Slate Office and Allied Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Slate Office position performs unexpectedly, Allied Properties 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 Allied Properties will offset losses from the drop in Allied Properties' long position.| Slate Office vs. Franklin Street Properties | Slate Office vs. Douglas Emmett | Slate Office vs. Highwoods Properties | Slate Office vs. Brandywine Realty Trust |
| Allied Properties vs. Slate Office REIT | Allied Properties vs. Keppel REIT | Allied Properties vs. BTB Real Estate | Allied Properties vs. Franklin Street Properties |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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