Correlation Between Slate Grocery and Bitfarms

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

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

Diversification Opportunities for Slate Grocery and Bitfarms

0.26

Correlation Coefficient

Slate Grocery  Bitfarms

Modest diversification

The 3 months correlation between Slate and Bitfarms is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Slate Grocery REIT and Bitfarms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitfarms and Slate Grocery 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 Grocery REIT are associated (or correlated) with Bitfarms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitfarms has no effect on the direction of Slate Grocery i.e., Slate Grocery and Bitfarms go up and down completely randomly.

Pair Corralation between Slate Grocery and Bitfarms

Assuming the 90 days trading horizon Slate Grocery REIT is expected to under-perform the Bitfarms. But the stock apears to be less risky and, when comparing its historical volatility, Slate Grocery REIT is 4.58 times less risky than Bitfarms. The stock trades about -0.09 of its potential returns per unit of risk. The Bitfarms is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  285.00  in Bitfarms on September 30, 2024 and sell it today you would lose (51.00) from holding Bitfarms or give up 17.89% of portfolio value over 90 days.

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

Slate Grocery REIT  vs.  Bitfarms

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. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Bitfarms

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bitfarms has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Slate Grocery and Bitfarms

The main advantage of trading using opposite Slate Grocery and Bitfarms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Slate Grocery position performs unexpectedly, Bitfarms 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 Bitfarms will offset losses from the drop in Bitfarms' long position.

The idea behind Slate Grocery REIT and Bitfarms 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.