Correlation Between Slate Grocery and Maple Peak

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

Diversification Opportunities for Slate Grocery and Maple Peak

0.0

Correlation Coefficient

Slate Grocery  Maple Peak

Pay attention - limited upside

The 3 months correlation between Slate and Maple is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Slate Grocery REIT and Maple Peak Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Peak Investments 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 Maple Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Peak Investments has no effect on the direction of Slate Grocery i.e., Slate Grocery and Maple Peak go up and down completely randomly.

Pair Corralation between Slate Grocery and Maple Peak

Assuming the 90 days trading horizon Slate Grocery is expected to generate 11.19 times less return on investment than Maple Peak. But when comparing it to its historical volatility, Slate Grocery REIT is 7.25 times less risky than Maple Peak. It trades about 0.03 of its potential returns per unit of risk. Maple Peak Investments is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1.50  in Maple Peak Investments on October 5, 2024 and sell it today you would lose (0.50) from holding Maple Peak Investments or give up 33.33% of portfolio value over 90 days.

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

Slate Grocery REIT  vs.  Maple Peak Investments

Slate Grocery REIT

Risk-Adjusted Performance

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

Maple Peak Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maple Peak Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Maple Peak is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Slate Grocery and Maple Peak

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

The idea behind Slate Grocery REIT and Maple Peak Investments 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..