Correlation Between Plaza Retail and Slate Grocery

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

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

Diversification Opportunities for Plaza Retail and Slate Grocery

0.09

Correlation Coefficient

Plaza Retail  Slate Grocery

Significant diversification

The 3 months correlation between Plaza and Slate is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Retail REIT 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 Plaza Retail 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 Plaza Retail REIT 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 Plaza Retail i.e., Plaza Retail and Slate Grocery go up and down completely randomly.

Pair Corralation between Plaza Retail and Slate Grocery

Assuming the 90 days horizon Plaza Retail REIT is expected to generate 1.31 times more return on investment than Slate Grocery. However, Plaza Retail is 1.31 times more volatile than Slate Grocery REIT. It trades about 0.08 of its potential returns per unit of risk. Slate Grocery REIT is currently generating about 0.03 per unit of risk. If you would invest  246.00  in Plaza Retail REIT on December 21, 2024 and sell it today you would earn a total of  16.00  from holding Plaza Retail REIT or generate 6.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	89.83%
Values	Daily Returns

Plaza Retail REIT  vs.  Slate Grocery REIT

Plaza Retail REIT

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Plaza Retail REIT are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Plaza Retail may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Slate Grocery REIT

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Slate Grocery REIT are ranked lower than 2 (%) 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 Plaza Retail and Slate Grocery

The main advantage of trading using opposite Plaza Retail and Slate Grocery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plaza Retail 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 Plaza Retail REIT 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.