Correlation Between Slate Grocery and Retail Opportunity
Can any of the company-specific risk be diversified away by investing in both Slate Grocery and Retail Opportunity 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 Grocery and Retail Opportunity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Slate Grocery REIT and Retail Opportunity Investments, you can compare the effects of market volatilities on Slate Grocery and Retail Opportunity 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 Grocery with a short position of Retail Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Slate Grocery and Retail Opportunity.
Diversification Opportunities for Slate Grocery and Retail Opportunity
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Slate and Retail is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Slate Grocery REIT and Retail Opportunity Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Opportunity and Slate Grocery 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 Grocery REIT are associated (or correlated) with Retail Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Opportunity has no effect on the direction of Slate Grocery i.e., Slate Grocery and Retail Opportunity go up and down completely randomly.
Pair Corralation between Slate Grocery and Retail Opportunity
Assuming the 90 days horizon Slate Grocery is expected to generate 2.43 times less return on investment than Retail Opportunity. But when comparing it to its historical volatility, Slate Grocery REIT is 1.49 times less risky than Retail Opportunity. It trades about 0.16 of its potential returns per unit of risk. Retail Opportunity Investments is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,566 in Retail Opportunity Investments on August 28, 2024 and sell it today you would earn a total of 175.00 from holding Retail Opportunity Investments or generate 11.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Slate Grocery REIT vs. Retail Opportunity Investments
Performance |
| Timeline |
| Slate Grocery REIT |
| Retail Opportunity |
Slate Grocery and Retail Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Slate Grocery and Retail Opportunity
The main advantage of trading using opposite Slate Grocery and Retail Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Slate Grocery position performs unexpectedly, Retail Opportunity 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 Retail Opportunity will offset losses from the drop in Retail Opportunity's long position.| Slate Grocery vs. Choice Properties Real | Slate Grocery vs. CT Real Estate | Slate Grocery vs. Firm Capital Property | Slate Grocery vs. Riocan REIT |
| Retail Opportunity vs. Kite Realty Group | Retail Opportunity vs. Urban Edge Properties | Retail Opportunity vs. Acadia Realty Trust |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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