Correlation Between Slate Office and Dream Office
Can any of the company-specific risk be diversified away by investing in both Slate Office and Dream Office 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 Dream Office 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 Dream Office Real, you can compare the effects of market volatilities on Slate Office and Dream Office 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 Dream Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Slate Office and Dream Office.
Diversification Opportunities for Slate Office and Dream Office
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Slate and Dream is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Slate Office REIT and Dream Office Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Office 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 Dream Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Office Real has no effect on the direction of Slate Office i.e., Slate Office and Dream Office go up and down completely randomly.
Pair Corralation between Slate Office and Dream Office
Assuming the 90 days trading horizon Slate Office REIT is expected to under-perform the Dream Office. In addition to that, Slate Office is 2.93 times more volatile than Dream Office Real. It trades about -0.32 of its total potential returns per unit of risk. Dream Office Real is currently generating about -0.23 per unit of volatility. If you would invest 2,082 in Dream Office Real on September 2, 2024 and sell it today you would lose (164.00) from holding Dream Office Real or give up 7.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Slate Office REIT vs. Dream Office Real
Performance |
| Timeline |
| Slate Office REIT |
| Dream Office Real |
Slate Office and Dream Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Slate Office and Dream Office
The main advantage of trading using opposite Slate Office and Dream Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Slate Office position performs unexpectedly, Dream Office 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 Dream Office will offset losses from the drop in Dream Office's long position.| Slate Office vs. True North Commercial | Slate Office vs. BTB Real Estate | Slate Office vs. Inovalis Real Estate | Slate Office vs. Slate Grocery REIT |
| Dream Office vs. Artis Real Estate | Dream Office vs. Boardwalk Real Estate | Dream Office vs. Allied Properties Real | Dream Office vs. HR 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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