Correlation Between Slate Office and First Capital
Can any of the company-specific risk be diversified away by investing in both Slate Office and First Capital 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 First Capital 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 First Capital Real, you can compare the effects of market volatilities on Slate Office and First Capital 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 First Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Slate Office and First Capital.
Diversification Opportunities for Slate Office and First Capital
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Slate and First is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Slate Office REIT and First Capital Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Capital 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 First Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Capital Real has no effect on the direction of Slate Office i.e., Slate Office and First Capital go up and down completely randomly.
Pair Corralation between Slate Office and First Capital
Assuming the 90 days trading horizon Slate Office REIT is expected to under-perform the First Capital. In addition to that, Slate Office is 4.18 times more volatile than First Capital Real. It trades about -0.06 of its total potential returns per unit of risk. First Capital Real is currently generating about 0.03 per unit of volatility. If you would invest 1,522 in First Capital Real on September 2, 2024 and sell it today you would earn a total of 272.00 from holding First Capital Real or generate 17.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Slate Office REIT vs. First Capital Real
Performance |
| Timeline |
| Slate Office REIT |
| First Capital Real |
Slate Office and First Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Slate Office and First Capital
The main advantage of trading using opposite Slate Office and First Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Slate Office position performs unexpectedly, First Capital 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 First Capital will offset losses from the drop in First Capital'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 |
| First Capital vs. Slate Office REIT | First Capital vs. Automotive Properties Real | First Capital vs. BTB Real Estate | First Capital vs. CT 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 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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