Correlation Between Slate Grocery and Nano One

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

Diversification Opportunities for Slate Grocery and Nano One

-0.14

Correlation Coefficient

Slate Grocery  Nano One

Good diversification

The 3 months correlation between Slate and Nano is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Slate Grocery REIT and Nano One Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano One Materials 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 Nano One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano One Materials has no effect on the direction of Slate Grocery i.e., Slate Grocery and Nano One go up and down completely randomly.

Pair Corralation between Slate Grocery and Nano One

Assuming the 90 days trading horizon Slate Grocery REIT is expected to under-perform the Nano One. But the stock apears to be less risky and, when comparing its historical volatility, Slate Grocery REIT is 3.15 times less risky than Nano One. The stock trades about -0.06 of its potential returns per unit of risk. The Nano One Materials is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  109.00  in Nano One Materials on October 8, 2024 and sell it today you would lose (7.00) from holding Nano One Materials or give up 6.42% of portfolio value over 90 days.

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

Slate Grocery REIT  vs.  Nano One Materials

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 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.

Nano One Materials

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Slate Grocery and Nano One

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

The idea behind Slate Grocery REIT and Nano One Materials 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.