Correlation Between SL Green and Paiute Oil

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

Diversification Opportunities for SL Green and Paiute Oil

0.0

Correlation Coefficient

SL Green  Paiute Oil

Pay attention - limited upside

The 3 months correlation between SLG and Paiute is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and Paiute Oil Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paiute Oil Mining 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 Paiute Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paiute Oil Mining has no effect on the direction of SL Green i.e., SL Green and Paiute Oil go up and down completely randomly.

Pair Corralation between SL Green and Paiute Oil

Considering the 90-day investment horizon SL Green Realty is expected to generate 0.14 times more return on investment than Paiute Oil. However, SL Green Realty is 6.96 times less risky than Paiute Oil. It trades about 0.07 of its potential returns per unit of risk. Paiute Oil Mining is currently generating about -0.13 per unit of risk. If you would invest  6,871  in SL Green Realty on September 13, 2024 and sell it today you would earn a total of  487.00  from holding SL Green Realty or generate 7.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

SL Green Realty  vs.  Paiute Oil Mining

SL Green Realty

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SL Green Realty are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, SL Green may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Paiute Oil Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Paiute Oil Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with SL Green and Paiute Oil

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

The idea behind SL Green Realty and Paiute Oil Mining 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.