Correlation Between FLOW TRADERS and SL Green

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

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

Diversification Opportunities for FLOW TRADERS and SL Green

0.64

Correlation Coefficient

FLOW TRADERS  SL Green

Poor diversification

The 3 months correlation between FLOW and GEI is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD 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 FLOW TRADERS 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 FLOW TRADERS LTD 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 FLOW TRADERS i.e., FLOW TRADERS and SL Green go up and down completely randomly.

Pair Corralation between FLOW TRADERS and SL Green

Assuming the 90 days horizon FLOW TRADERS LTD is expected to generate 0.65 times more return on investment than SL Green. However, FLOW TRADERS LTD is 1.53 times less risky than SL Green. It trades about 0.21 of its potential returns per unit of risk. SL Green Realty is currently generating about -0.14 per unit of risk. If you would invest  2,128  in FLOW TRADERS LTD on September 19, 2024 and sell it today you would earn a total of  124.00  from holding FLOW TRADERS LTD or generate 5.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

FLOW TRADERS LTD  vs.  SL Green Realty

FLOW TRADERS LTD

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FLOW TRADERS LTD are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, FLOW TRADERS reported solid returns over the last few months and may actually be approaching a breakup point.

SL Green Realty

Risk-Adjusted Performance

3 of 100

OK

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.

Pair Trading with FLOW TRADERS and SL Green

The main advantage of trading using opposite FLOW TRADERS and SL Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS 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 FLOW TRADERS LTD 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.