Correlation Between SL Green and One Liberty

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

Diversification Opportunities for SL Green and One Liberty

0.75

Correlation Coefficient

SL Green  One Liberty

Poor diversification

The 3 months correlation between SLG and One is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and One Liberty Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Liberty Properties 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 One Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Liberty Properties has no effect on the direction of SL Green i.e., SL Green and One Liberty go up and down completely randomly.

Pair Corralation between SL Green and One Liberty

Considering the 90-day investment horizon SL Green is expected to generate 4.94 times less return on investment than One Liberty. In addition to that, SL Green is 1.07 times more volatile than One Liberty Properties. It trades about 0.06 of its total potential returns per unit of risk. One Liberty Properties is currently generating about 0.32 per unit of volatility. If you would invest  2,683  in One Liberty Properties on August 30, 2024 and sell it today you would earn a total of  332.00  from holding One Liberty Properties or generate 12.37% return on investment over 90 days.

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

SL Green Realty  vs.  One Liberty Properties

SL Green Realty

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SL Green Realty are ranked lower than 12 (%) 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.

One Liberty Properties

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in One Liberty Properties are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak essential indicators, One Liberty reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SL Green and One Liberty

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

The idea behind SL Green Realty and One Liberty Properties 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.