Correlation Between Highwood Asset and Slate Grocery

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

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

Diversification Opportunities for Highwood Asset and Slate Grocery

0.35

Correlation Coefficient

Highwood Asset  Slate Grocery

Weak diversification

The 3 months correlation between Highwood and Slate is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Highwood Asset 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 Highwood Asset 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 Highwood Asset 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 Highwood Asset i.e., Highwood Asset and Slate Grocery go up and down completely randomly.

Pair Corralation between Highwood Asset and Slate Grocery

Assuming the 90 days horizon Highwood Asset is expected to generate 6.43 times less return on investment than Slate Grocery. In addition to that, Highwood Asset is 1.52 times more volatile than Slate Grocery REIT. It trades about 0.01 of its total potential returns per unit of risk. Slate Grocery REIT is currently generating about 0.14 per unit of volatility. 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

Highwood Asset Management  vs.  Slate Grocery REIT

Highwood Asset Management

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Highwood Asset Management are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Highwood Asset is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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 Highwood Asset and Slate Grocery

The main advantage of trading using opposite Highwood Asset and Slate Grocery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highwood Asset 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 Highwood Asset 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 Transaction History module to view history of all your transactions and understand their impact on performance.