Correlation Between Slate Grocery and Foran Mining

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

Diversification Opportunities for Slate Grocery and Foran Mining

-0.26

Correlation Coefficient

Slate Grocery  Foran Mining

Very good diversification

The 3 months correlation between Slate and Foran is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Slate Grocery REIT and Foran Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foran Mining 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 Foran Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foran Mining has no effect on the direction of Slate Grocery i.e., Slate Grocery and Foran Mining go up and down completely randomly.

Pair Corralation between Slate Grocery and Foran Mining

Assuming the 90 days trading horizon Slate Grocery is expected to generate 3.25 times less return on investment than Foran Mining. But when comparing it to its historical volatility, Slate Grocery REIT is 1.44 times less risky than Foran Mining. It trades about 0.02 of its potential returns per unit of risk. Foran Mining is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  290.00  in Foran Mining on September 14, 2024 and sell it today you would earn a total of  131.00  from holding Foran Mining or generate 45.17% return on investment over 90 days.

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

Slate Grocery REIT  vs.  Foran Mining

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.

Foran Mining

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Foran Mining are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal primary indicators, Foran Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Slate Grocery and Foran Mining

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

The idea behind Slate Grocery REIT and Foran Mining 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.