Correlation Between Supermarket Income and GRIT Real
Can any of the company-specific risk be diversified away by investing in both Supermarket Income and GRIT Real 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 Supermarket Income and GRIT Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supermarket Income REIT and GRIT Real Estate, you can compare the effects of market volatilities on Supermarket Income and GRIT Real 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 Supermarket Income with a short position of GRIT Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supermarket Income and GRIT Real.
Diversification Opportunities for Supermarket Income and GRIT Real
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Supermarket and GRIT is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Supermarket Income REIT and GRIT Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRIT Real Estate and Supermarket Income 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 Supermarket Income REIT are associated (or correlated) with GRIT Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRIT Real Estate has no effect on the direction of Supermarket Income i.e., Supermarket Income and GRIT Real go up and down completely randomly.
Pair Corralation between Supermarket Income and GRIT Real
Assuming the 90 days trading horizon Supermarket Income REIT is expected to generate 0.37 times more return on investment than GRIT Real. However, Supermarket Income REIT is 2.68 times less risky than GRIT Real. It trades about 0.21 of its potential returns per unit of risk. GRIT Real Estate is currently generating about -0.21 per unit of risk. If you would invest 6,780 in Supermarket Income REIT on September 14, 2024 and sell it today you would earn a total of 270.00 from holding Supermarket Income REIT or generate 3.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supermarket Income REIT vs. GRIT Real Estate
Performance |
| Timeline |
| Supermarket Income REIT |
| GRIT Real Estate |
Supermarket Income and GRIT Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supermarket Income and GRIT Real
The main advantage of trading using opposite Supermarket Income and GRIT Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supermarket Income position performs unexpectedly, GRIT Real 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 GRIT Real will offset losses from the drop in GRIT Real's long position.| Supermarket Income vs. Microchip Technology | Supermarket Income vs. Take Two Interactive Software | Supermarket Income vs. Ashtead Technology Holdings | Supermarket Income vs. Sabien Technology Group |
| GRIT Real vs. Derwent London PLC | GRIT Real vs. Hammerson PLC | GRIT Real vs. Workspace Group PLC | GRIT Real vs. Supermarket Income REIT |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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