Correlation Between Slate Grocery and Bitfarms

Can any of the company-specific risk be diversified away by investing in both Slate Grocery and Bitfarms 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 Bitfarms 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 Bitfarms, you can compare the effects of market volatilities on Slate Grocery and Bitfarms 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 Bitfarms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Slate Grocery and Bitfarms.

Diversification Opportunities for Slate Grocery and Bitfarms

0.11

Correlation Coefficient

Slate Grocery  Bitfarms

Average diversification

The 3 months correlation between Slate and Bitfarms is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Slate Grocery REIT and Bitfarms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitfarms 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 Bitfarms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitfarms has no effect on the direction of Slate Grocery i.e., Slate Grocery and Bitfarms go up and down completely randomly.

Pair Corralation between Slate Grocery and Bitfarms

Assuming the 90 days trading horizon Slate Grocery is expected to generate 14.25 times less return on investment than Bitfarms. But when comparing it to its historical volatility, Slate Grocery REIT is 4.72 times less risky than Bitfarms. It trades about 0.02 of its potential returns per unit of risk. Bitfarms is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  268.00  in Bitfarms on September 14, 2024 and sell it today you would earn a total of  20.00  from holding Bitfarms or generate 7.46% return on investment over 90 days.

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

Slate Grocery REIT  vs.  Bitfarms

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.

Bitfarms

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bitfarms are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Bitfarms displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Slate Grocery and Bitfarms

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

The idea behind Slate Grocery REIT and Bitfarms 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.