Correlation Between Seritage Growth and Slate Grocery

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

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

Diversification Opportunities for Seritage Growth and Slate Grocery

0.36

Correlation Coefficient

Seritage Growth  Slate Grocery

Weak diversification

The 3 months correlation between Seritage and Slate is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Seritage Growth Properties 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 Seritage Growth 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 Seritage Growth Properties 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 Seritage Growth i.e., Seritage Growth and Slate Grocery go up and down completely randomly.

Pair Corralation between Seritage Growth and Slate Grocery

Considering the 90-day investment horizon Seritage Growth Properties is expected to under-perform the Slate Grocery. In addition to that, Seritage Growth is 1.86 times more volatile than Slate Grocery REIT. It trades about -0.02 of its total potential returns per unit of risk. Slate Grocery REIT is currently generating about 0.02 per unit of volatility. If you would invest  1,024  in Slate Grocery REIT on September 13, 2024 and sell it today you would earn a total of  8.00  from holding Slate Grocery REIT or generate 0.78% return on investment over 90 days.

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

Seritage Growth Properties  vs.  Slate Grocery REIT

Seritage Growth Prop

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seritage Growth Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Seritage Growth is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

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. Despite nearly stable basic indicators, Slate Grocery is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Seritage Growth and Slate Grocery

The main advantage of trading using opposite Seritage Growth and Slate Grocery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seritage Growth 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 Seritage Growth Properties 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.