Correlation Between Lundin Energy and Slate Grocery

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

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

Diversification Opportunities for Lundin Energy and Slate Grocery

-0.28

Correlation Coefficient

Lundin Energy  Slate Grocery

Very good diversification

The 3 months correlation between Lundin and Slate is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Energy AB 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 Lundin Energy 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 Lundin Energy AB 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 Lundin Energy i.e., Lundin Energy and Slate Grocery go up and down completely randomly.

Pair Corralation between Lundin Energy and Slate Grocery

Assuming the 90 days horizon Lundin Energy AB is expected to under-perform the Slate Grocery. In addition to that, Lundin Energy is 2.4 times more volatile than Slate Grocery REIT. It trades about -0.18 of its total potential returns per unit of risk. Slate Grocery REIT is currently generating about 0.04 per unit of volatility. If you would invest  961.00  in Slate Grocery REIT on December 29, 2024 and sell it today you would earn a total of  24.00  from holding Slate Grocery REIT or generate 2.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.89%
Values	Daily Returns

Lundin Energy AB  vs.  Slate Grocery REIT

Lundin Energy AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lundin Energy AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Slate Grocery REIT

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Slate Grocery REIT are ranked lower than 3 (%) 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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Lundin Energy and Slate Grocery

The main advantage of trading using opposite Lundin Energy and Slate Grocery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Energy 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 Lundin Energy AB 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 Stocks Directory module to find actively traded stocks across global markets.