Correlation Between Element Fleet and Slate Grocery

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

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

Diversification Opportunities for Element Fleet and Slate Grocery

0.32

Correlation Coefficient

Element Fleet  Slate Grocery

Weak diversification

The 3 months correlation between Element and Slate is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Element Fleet Management 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 Element Fleet 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 Element Fleet Management 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 Element Fleet i.e., Element Fleet and Slate Grocery go up and down completely randomly.

Pair Corralation between Element Fleet and Slate Grocery

Assuming the 90 days trading horizon Element Fleet is expected to generate 1.89 times less return on investment than Slate Grocery. But when comparing it to its historical volatility, Element Fleet Management is 1.23 times less risky than Slate Grocery. It trades about 0.09 of its potential returns per unit of risk. Slate Grocery REIT is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  940.00  in Slate Grocery REIT on September 5, 2024 and sell it today you would earn a total of  120.00  from holding Slate Grocery REIT or generate 12.77% return on investment over 90 days.

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

Element Fleet Management  vs.  Slate Grocery REIT

Element Fleet Management

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Element Fleet Management are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Element Fleet may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Slate Grocery REIT

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Slate Grocery REIT are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Slate Grocery unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Element Fleet and Slate Grocery

The main advantage of trading using opposite Element Fleet and Slate Grocery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Element Fleet 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 Element Fleet Management 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.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.