Correlation Between Automotive Properties and Slate Grocery

Can any of the company-specific risk be diversified away by investing in both Automotive Properties and Slate Grocery 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 Automotive Properties and Slate Grocery into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Automotive Properties Real and Slate Grocery REIT, you can compare the effects of market volatilities on Automotive Properties and Slate Grocery 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 Automotive Properties with a short position of Slate Grocery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automotive Properties and Slate Grocery.

Diversification Opportunities for Automotive Properties and Slate Grocery

-0.44

Correlation Coefficient

Automotive Properties  Slate Grocery

Very good diversification

The 3 months correlation between Automotive and Slate is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Automotive Properties Real and Slate Grocery REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slate Grocery REIT and Automotive Properties 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 Automotive Properties Real are associated (or correlated) with Slate Grocery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slate Grocery REIT has no effect on the direction of Automotive Properties i.e., Automotive Properties and Slate Grocery go up and down completely randomly.

Pair Corralation between Automotive Properties and Slate Grocery

Assuming the 90 days trading horizon Automotive Properties Real is expected to under-perform the Slate Grocery. But the stock apears to be less risky and, when comparing its historical volatility, Automotive Properties Real is 1.16 times less risky than Slate Grocery. The stock trades about -0.17 of its potential returns per unit of risk. The Slate Grocery REIT is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,022  in Slate Grocery REIT on September 13, 2024 and sell it today you would earn a total of  9.00  from holding Slate Grocery REIT or generate 0.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Automotive Properties Real  vs.  Slate Grocery REIT

Automotive Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Automotive Properties Real has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Slate Grocery REIT

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Slate Grocery REIT are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Slate Grocery is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Automotive Properties and Slate Grocery

The main advantage of trading using opposite Automotive Properties and Slate Grocery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automotive Properties position performs unexpectedly, Slate Grocery 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 Slate Grocery will offset losses from the drop in Slate Grocery's long position.

The idea behind Automotive Properties Real and Slate Grocery REIT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.