Correlation Between BOS Better and SL Green

Can any of the company-specific risk be diversified away by investing in both BOS Better and SL Green 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 BOS Better and SL Green into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BOS Better Online and SL Green Realty, you can compare the effects of market volatilities on BOS Better and SL Green 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 BOS Better with a short position of SL Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOS Better and SL Green.

Diversification Opportunities for BOS Better and SL Green

0.28

Correlation Coefficient

BOS Better  SL Green

Modest diversification

The 3 months correlation between BOS and SLG is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding BOS Better Online and SL Green Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SL Green Realty and BOS Better 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 BOS Better Online are associated (or correlated) with SL Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SL Green Realty has no effect on the direction of BOS Better i.e., BOS Better and SL Green go up and down completely randomly.

Pair Corralation between BOS Better and SL Green

Given the investment horizon of 90 days BOS Better Online is expected to generate 0.59 times more return on investment than SL Green. However, BOS Better Online is 1.69 times less risky than SL Green. It trades about -0.11 of its potential returns per unit of risk. SL Green Realty is currently generating about -0.31 per unit of risk. If you would invest  337.00  in BOS Better Online on September 24, 2024 and sell it today you would lose (10.00) from holding BOS Better Online or give up 2.97% of portfolio value over 90 days.

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

BOS Better Online  vs.  SL Green Realty

BOS Better Online

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BOS Better Online are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, BOS Better may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SL Green Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SL Green Realty has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, SL Green is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BOS Better and SL Green

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

The idea behind BOS Better Online and SL Green Realty 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.