Correlation Between First Capital and Slate Grocery

Can any of the company-specific risk be diversified away by investing in both First 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 First 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 First Capital Real and Slate Grocery REIT, you can compare the effects of market volatilities on First 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 First Capital with a short position of Slate Grocery. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Capital and Slate Grocery.

Diversification Opportunities for First Capital and Slate Grocery

0.48

Correlation Coefficient

First Capital  Slate Grocery

Very weak diversification

The 3 months correlation between First and Slate is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding First Capital Real 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 First 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 First Capital Real 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 First Capital i.e., First Capital and Slate Grocery go up and down completely randomly.

Pair Corralation between First Capital and Slate Grocery

Assuming the 90 days trading horizon First Capital Real is expected to generate 1.14 times more return on investment than Slate Grocery. However, First Capital is 1.14 times more volatile than Slate Grocery REIT. It trades about 0.27 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  1,605  in First Capital Real on April 21, 2025 and sell it today you would earn a total of  283.00  from holding First Capital Real or generate 17.63% return on investment over 90 days.

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

First Capital Real  vs.  Slate Grocery REIT

First Capital Real

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Capital Real are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, First Capital sustained solid returns over the last few months and may actually be approaching a breakup point.

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 First Capital and Slate Grocery

The main advantage of trading using opposite First Capital and Slate Grocery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First 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 First Capital Real 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 Global Correlations module to find global opportunities by holding instruments from different markets.