Correlation Between Slate Grocery and Guru Organic

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

Diversification Opportunities for Slate Grocery and Guru Organic

0.45

Correlation Coefficient

Slate Grocery  Guru Organic

Very weak diversification

The 3 months correlation between Slate and Guru is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Slate Grocery REIT and Guru Organic Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guru Organic Energy 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 Guru Organic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guru Organic Energy has no effect on the direction of Slate Grocery i.e., Slate Grocery and Guru Organic go up and down completely randomly.

Pair Corralation between Slate Grocery and Guru Organic

Assuming the 90 days trading horizon Slate Grocery REIT is expected to generate 0.42 times more return on investment than Guru Organic. However, Slate Grocery REIT is 2.39 times less risky than Guru Organic. It trades about 0.01 of its potential returns per unit of risk. Guru Organic Energy is currently generating about -0.02 per unit of risk. If you would invest  996.00  in Slate Grocery REIT on September 23, 2024 and sell it today you would lose (21.00) from holding Slate Grocery REIT or give up 2.11% of portfolio value over 90 days.

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

Slate Grocery REIT  vs.  Guru Organic Energy

Slate Grocery REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Slate Grocery REIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Slate Grocery is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Guru Organic Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guru Organic Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Slate Grocery and Guru Organic

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

The idea behind Slate Grocery REIT and Guru Organic Energy 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.