Correlation Between Slate Grocery and GOLDMAN SACHS

Can any of the company-specific risk be diversified away by investing in both Slate Grocery and GOLDMAN SACHS 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 GOLDMAN SACHS 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 GOLDMAN SACHS CDR, you can compare the effects of market volatilities on Slate Grocery and GOLDMAN SACHS 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 GOLDMAN SACHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Slate Grocery and GOLDMAN SACHS.

Diversification Opportunities for Slate Grocery and GOLDMAN SACHS

0.11

Correlation Coefficient

Slate Grocery  GOLDMAN SACHS

Average diversification

The 3 months correlation between Slate and GOLDMAN is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Slate Grocery REIT and GOLDMAN SACHS CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLDMAN SACHS CDR 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 GOLDMAN SACHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLDMAN SACHS CDR has no effect on the direction of Slate Grocery i.e., Slate Grocery and GOLDMAN SACHS go up and down completely randomly.

Pair Corralation between Slate Grocery and GOLDMAN SACHS

Assuming the 90 days trading horizon Slate Grocery REIT is expected to generate 0.75 times more return on investment than GOLDMAN SACHS. However, Slate Grocery REIT is 1.32 times less risky than GOLDMAN SACHS. It trades about 0.05 of its potential returns per unit of risk. GOLDMAN SACHS CDR is currently generating about -0.01 per unit of risk. If you would invest  953.00  in Slate Grocery REIT on December 28, 2024 and sell it today you would earn a total of  40.00  from holding Slate Grocery REIT or generate 4.2% return on investment over 90 days.

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

Slate Grocery REIT  vs.  GOLDMAN SACHS CDR

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. In spite of comparatively stable basic indicators, Slate Grocery is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

GOLDMAN SACHS CDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days GOLDMAN SACHS CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, GOLDMAN SACHS is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Slate Grocery and GOLDMAN SACHS

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

The idea behind Slate Grocery REIT and GOLDMAN SACHS CDR 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..