Correlation Between SL Green and Mirvac

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

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

Diversification Opportunities for SL Green and Mirvac

-0.41

Correlation Coefficient

SL Green  Mirvac

Very good diversification

The 3 months correlation between GEI and Mirvac is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and Mirvac Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirvac Group and SL Green 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 SL Green Realty are associated (or correlated) with Mirvac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirvac Group has no effect on the direction of SL Green i.e., SL Green and Mirvac go up and down completely randomly.

Pair Corralation between SL Green and Mirvac

Assuming the 90 days horizon SL Green Realty is expected to generate 1.35 times more return on investment than Mirvac. However, SL Green is 1.35 times more volatile than Mirvac Group. It trades about 0.05 of its potential returns per unit of risk. Mirvac Group is currently generating about -0.17 per unit of risk. If you would invest  6,374  in SL Green Realty on September 20, 2024 and sell it today you would earn a total of  330.00  from holding SL Green Realty or generate 5.18% return on investment over 90 days.

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

SL Green Realty  vs.  Mirvac Group

SL Green Realty

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SL Green Realty are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SL Green is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Mirvac Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mirvac Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with SL Green and Mirvac

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

The idea behind SL Green Realty and Mirvac Group 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.