Correlation Between Phillips Edison and Slate Grocery

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

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

Diversification Opportunities for Phillips Edison and Slate Grocery

0.44

Correlation Coefficient

Phillips Edison  Slate Grocery

Very weak diversification

The 3 months correlation between Phillips and Slate is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Phillips Edison Co 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 Phillips Edison 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 Phillips Edison Co 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 Phillips Edison i.e., Phillips Edison and Slate Grocery go up and down completely randomly.

Pair Corralation between Phillips Edison and Slate Grocery

Given the investment horizon of 90 days Phillips Edison Co is expected to generate 0.93 times more return on investment than Slate Grocery. However, Phillips Edison Co is 1.07 times less risky than Slate Grocery. It trades about -0.27 of its potential returns per unit of risk. Slate Grocery REIT is currently generating about -0.32 per unit of risk. If you would invest  3,910  in Phillips Edison Co on October 8, 2024 and sell it today you would lose (241.00) from holding Phillips Edison Co or give up 6.16% of portfolio value over 90 days.

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

Phillips Edison Co  vs.  Slate Grocery REIT

Phillips Edison

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Phillips Edison Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Phillips Edison is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

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. 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 Phillips Edison and Slate Grocery

The main advantage of trading using opposite Phillips Edison and Slate Grocery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phillips Edison 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 Phillips Edison Co 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..