Correlation Between Pono Capital and SL Green

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

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

Diversification Opportunities for Pono Capital and SL Green

-0.05

Correlation Coefficient

Pono Capital  SL Green

Good diversification

The 3 months correlation between Pono and SLG is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Pono Capital Two 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 Pono Capital 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 Pono Capital Two 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 Pono Capital i.e., Pono Capital and SL Green go up and down completely randomly.

Pair Corralation between Pono Capital and SL Green

Assuming the 90 days horizon Pono Capital Two is expected to generate 69.24 times more return on investment than SL Green. However, Pono Capital is 69.24 times more volatile than SL Green Realty. It trades about 0.17 of its potential returns per unit of risk. SL Green Realty is currently generating about 0.09 per unit of risk. If you would invest  3.50  in Pono Capital Two on October 5, 2024 and sell it today you would earn a total of  3.80  from holding Pono Capital Two or generate 108.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	39.93%
Values	Daily Returns

Pono Capital Two  vs.  SL Green Realty

Pono Capital Two

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pono Capital Two has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Pono Capital is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

SL Green Realty

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SL Green Realty are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, SL Green is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Pono Capital and SL Green

The main advantage of trading using opposite Pono Capital and SL Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pono Capital 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 Pono Capital Two 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.

Check out your portfolio center.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.