Correlation Between Slate Office and Exchange Income

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

Diversification Opportunities for Slate Office and Exchange Income

-0.74

Correlation Coefficient

Slate Office  Exchange Income

Pay attention - limited upside

The 3 months correlation between Slate and Exchange is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Slate Office REIT and Exchange Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Income 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 Exchange Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Income has no effect on the direction of Slate Office i.e., Slate Office and Exchange Income go up and down completely randomly.

Pair Corralation between Slate Office and Exchange Income

Assuming the 90 days horizon Slate Office REIT is expected to under-perform the Exchange Income. In addition to that, Slate Office is 2.57 times more volatile than Exchange Income. It trades about -0.06 of its total potential returns per unit of risk. Exchange Income is currently generating about 0.24 per unit of volatility. If you would invest  4,104  in Exchange Income on May 17, 2025 and sell it today you would earn a total of  1,331  from holding Exchange Income or generate 32.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Slate Office REIT  vs.  Exchange Income

Slate Office REIT

Risk-Adjusted Performance

Weakest

Over the last 90 days Slate Office REIT 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 basic indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Exchange Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Exchange Income are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Exchange Income reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Slate Office and Exchange Income

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

The idea behind Slate Office REIT and Exchange Income 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.