Correlation Between Envista Holdings and SL Green

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

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

Diversification Opportunities for Envista Holdings and SL Green

0.4

Correlation Coefficient

Envista Holdings  SL Green

Very weak diversification

The 3 months correlation between Envista and SLG is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Envista Holdings Corp 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 Envista Holdings 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 Envista Holdings Corp 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 Envista Holdings i.e., Envista Holdings and SL Green go up and down completely randomly.

Pair Corralation between Envista Holdings and SL Green

Given the investment horizon of 90 days Envista Holdings Corp is expected to generate 1.16 times more return on investment than SL Green. However, Envista Holdings is 1.16 times more volatile than SL Green Realty. It trades about -0.03 of its potential returns per unit of risk. SL Green Realty is currently generating about -0.1 per unit of risk. If you would invest  1,803  in Envista Holdings Corp on December 19, 2024 and sell it today you would lose (113.00) from holding Envista Holdings Corp or give up 6.27% of portfolio value over 90 days.

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

Envista Holdings Corp  vs.  SL Green Realty

Envista Holdings Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Envista Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Envista Holdings is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

SL Green Realty

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Envista Holdings and SL Green

The main advantage of trading using opposite Envista Holdings and SL Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Envista Holdings 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 Envista Holdings Corp 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.