Correlation Between Firm Capital and Slate Grocery

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

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

Diversification Opportunities for Firm Capital and Slate Grocery

0.69

Correlation Coefficient

Firm Capital  Slate Grocery

Poor diversification

The 3 months correlation between Firm and Slate is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Firm Capital Mortgage and Slate Grocery REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slate Grocery REIT and Firm Capital 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 Firm Capital Mortgage are associated (or correlated) with Slate Grocery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slate Grocery REIT has no effect on the direction of Firm Capital i.e., Firm Capital and Slate Grocery go up and down completely randomly.

Pair Corralation between Firm Capital and Slate Grocery

Assuming the 90 days horizon Firm Capital Mortgage is expected to generate 0.58 times more return on investment than Slate Grocery. However, Firm Capital Mortgage is 1.74 times less risky than Slate Grocery. It trades about 0.22 of its potential returns per unit of risk. Slate Grocery REIT is currently generating about 0.13 per unit of risk. If you would invest  1,152  in Firm Capital Mortgage on April 22, 2025 and sell it today you would earn a total of  82.00  from holding Firm Capital Mortgage or generate 7.12% return on investment over 90 days.

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

Firm Capital Mortgage  vs.  Slate Grocery REIT

Firm Capital Mortgage

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Firm Capital Mortgage are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Firm Capital may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Slate Grocery REIT

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Slate Grocery REIT are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Slate Grocery may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Firm Capital and Slate Grocery

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

The idea behind Firm Capital Mortgage and Slate Grocery REIT 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.