Correlation Between Slate Office and PAX Global
Can any of the company-specific risk be diversified away by investing in both Slate Office and PAX Global 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 Office and PAX Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Slate Office REIT and PAX Global Technology, you can compare the effects of market volatilities on Slate Office and PAX Global 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 Office with a short position of PAX Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Slate Office and PAX Global.
Diversification Opportunities for Slate Office and PAX Global
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Slate and PAX is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Slate Office REIT and PAX Global Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAX Global Technology and Slate Office 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 Office REIT are associated (or correlated) with PAX Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAX Global Technology has no effect on the direction of Slate Office i.e., Slate Office and PAX Global go up and down completely randomly.
Pair Corralation between Slate Office and PAX Global
Assuming the 90 days horizon Slate Office REIT is expected to generate 2.01 times more return on investment than PAX Global. However, Slate Office is 2.01 times more volatile than PAX Global Technology. It trades about 0.06 of its potential returns per unit of risk. PAX Global Technology is currently generating about 0.07 per unit of risk. If you would invest 26.00 in Slate Office REIT on September 12, 2024 and sell it today you would earn a total of 3.00 from holding Slate Office REIT or generate 11.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Slate Office REIT vs. PAX Global Technology
Performance |
Timeline |
Slate Office REIT |
PAX Global Technology |
Slate Office and PAX Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Slate Office and PAX Global
The main advantage of trading using opposite Slate Office and PAX Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Slate Office position performs unexpectedly, PAX Global 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 PAX Global will offset losses from the drop in PAX Global's long position.Slate Office vs. Franklin Street Properties | Slate Office vs. Douglas Emmett | Slate Office vs. Highwoods Properties | Slate Office vs. Brandywine Realty Trust |
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Check out your portfolio center.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 Managers module to screen money managers from public funds and ETFs managed around the world.
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