Correlation Between SL Green and Lineage, Common

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

Diversification Opportunities for SL Green and Lineage, Common

-0.73

Correlation Coefficient

SL Green  Lineage, Common

Pay attention - limited upside

The 3 months correlation between SLG and Lineage, is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and Lineage, Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lineage, Common Stock 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 Lineage, Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lineage, Common Stock has no effect on the direction of SL Green i.e., SL Green and Lineage, Common go up and down completely randomly.

Pair Corralation between SL Green and Lineage, Common

Considering the 90-day investment horizon SL Green Realty is expected to generate 1.25 times more return on investment than Lineage, Common. However, SL Green is 1.25 times more volatile than Lineage, Common Stock. It trades about 0.15 of its potential returns per unit of risk. Lineage, Common Stock is currently generating about -0.27 per unit of risk. If you would invest  6,413  in SL Green Realty on September 4, 2024 and sell it today you would earn a total of  1,161  from holding SL Green Realty or generate 18.1% return on investment over 90 days.

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

SL Green Realty  vs.  Lineage, Common Stock

SL Green Realty

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SL Green Realty are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, SL Green reported solid returns over the last few months and may actually be approaching a breakup point.

Lineage, Common Stock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lineage, Common Stock has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with SL Green and Lineage, Common

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

The idea behind SL Green Realty and Lineage, Common Stock 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.