Correlation Between Shenzhen Investment and Slate Office
Can any of the company-specific risk be diversified away by investing in both Shenzhen Investment and Slate Office 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 Shenzhen Investment and Slate Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shenzhen Investment Holdings and Slate Office REIT, you can compare the effects of market volatilities on Shenzhen Investment and Slate Office 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 Shenzhen Investment with a short position of Slate Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Investment and Slate Office.
Diversification Opportunities for Shenzhen Investment and Slate Office
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shenzhen and Slate is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Investment Holdings and Slate Office REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slate Office REIT and Shenzhen Investment 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 Shenzhen Investment Holdings are associated (or correlated) with Slate Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slate Office REIT has no effect on the direction of Shenzhen Investment i.e., Shenzhen Investment and Slate Office go up and down completely randomly.
Pair Corralation between Shenzhen Investment and Slate Office
Assuming the 90 days horizon Shenzhen Investment is expected to generate 6.3 times less return on investment than Slate Office. But when comparing it to its historical volatility, Shenzhen Investment Holdings is 5.56 times less risky than Slate Office. It trades about 0.12 of its potential returns per unit of risk. Slate Office REIT is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 23.00 in Slate Office REIT on July 7, 2025 and sell it today you would earn a total of 7.00 from holding Slate Office REIT or generate 30.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Shenzhen Investment Holdings vs. Slate Office REIT
Performance |
| Timeline |
| Shenzhen Investment |
| Slate Office REIT |
Shenzhen Investment and Slate Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Investment and Slate Office
The main advantage of trading using opposite Shenzhen Investment and Slate Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Investment position performs unexpectedly, Slate Office 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 Office will offset losses from the drop in Slate Office's long position.| Shenzhen Investment vs. Jiangsu Expressway Co | Shenzhen Investment vs. Jiangsu Expressway | Shenzhen Investment vs. Sichuan Expressway | Shenzhen Investment vs. Shenzhen International Holdings |
| Slate Office vs. BTB Real Estate | Slate Office vs. City Office | Slate Office vs. Vornado Realty Trust | Slate Office vs. Slate Grocery REIT |
Check out your portfolio center.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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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