Correlation Between Slate Office and Sylvania Platinum

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

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

Diversification Opportunities for Slate Office and Sylvania Platinum

0.6

Correlation Coefficient

Slate Office  Sylvania Platinum

Poor diversification

The 3 months correlation between Slate and Sylvania is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Slate Office REIT and Sylvania Platinum Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sylvania Platinum and Slate Office 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 Office REIT are associated (or correlated) with Sylvania Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sylvania Platinum has no effect on the direction of Slate Office i.e., Slate Office and Sylvania Platinum go up and down completely randomly.

Pair Corralation between Slate Office and Sylvania Platinum

Assuming the 90 days horizon Slate Office REIT is expected to generate 3.74 times more return on investment than Sylvania Platinum. However, Slate Office is 3.74 times more volatile than Sylvania Platinum Limited. It trades about 0.17 of its potential returns per unit of risk. Sylvania Platinum Limited is currently generating about 0.01 per unit of risk. If you would invest  26.00  in Slate Office REIT on October 22, 2024 and sell it today you would earn a total of  7.00  from holding Slate Office REIT or generate 26.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.74%
Values	Daily Returns

Slate Office REIT  vs.  Sylvania Platinum Limited

Slate Office REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Slate Office REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Sylvania Platinum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sylvania Platinum Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Slate Office and Sylvania Platinum

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

The idea behind Slate Office REIT and Sylvania Platinum Limited 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.