Correlation Between SL Green and Femasys

Can any of the company-specific risk be diversified away by investing in both SL Green and Femasys 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 Femasys 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 Femasys, you can compare the effects of market volatilities on SL Green and Femasys 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 Femasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of SL Green and Femasys.

Diversification Opportunities for SL Green and Femasys

0.07

Correlation Coefficient

SL Green  Femasys

Significant diversification

The 3 months correlation between SLG and Femasys is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and Femasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Femasys 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 Femasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Femasys has no effect on the direction of SL Green i.e., SL Green and Femasys go up and down completely randomly.

Pair Corralation between SL Green and Femasys

Considering the 90-day investment horizon SL Green is expected to generate 1.09 times less return on investment than Femasys. But when comparing it to its historical volatility, SL Green Realty is 2.48 times less risky than Femasys. It trades about 0.09 of its potential returns per unit of risk. Femasys is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  94.00  in Femasys on October 9, 2024 and sell it today you would earn a total of  16.00  from holding Femasys or generate 17.02% return on investment over 90 days.

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

SL Green Realty  vs.  Femasys

SL Green Realty

Risk-Adjusted Performance

0 of 100

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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Femasys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Femasys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Femasys is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SL Green and Femasys

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

The idea behind SL Green Realty and Femasys 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.