Correlation Between SL Green and KAISER

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

Diversification Opportunities for SL Green and KAISER

0.68

Correlation Coefficient

SL Green  KAISER

Poor diversification

The 3 months correlation between SLG and KAISER is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and KAISER FOUNDATION HOSPITALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAISER FOUNDATION 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 KAISER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAISER FOUNDATION has no effect on the direction of SL Green i.e., SL Green and KAISER go up and down completely randomly.

Pair Corralation between SL Green and KAISER

Considering the 90-day investment horizon SL Green Realty is expected to under-perform the KAISER. But the stock apears to be less risky and, when comparing its historical volatility, SL Green Realty is 1.05 times less risky than KAISER. The stock trades about -0.06 of its potential returns per unit of risk. The KAISER FOUNDATION HOSPITALS is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  6,907  in KAISER FOUNDATION HOSPITALS on October 27, 2024 and sell it today you would earn a total of  551.00  from holding KAISER FOUNDATION HOSPITALS or generate 7.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	89.47%
Values	Daily Returns

SL Green Realty  vs.  KAISER FOUNDATION HOSPITALS

SL Green Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SL Green Realty has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

KAISER FOUNDATION

Risk-Adjusted Performance

7 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KAISER FOUNDATION HOSPITALS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, KAISER sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SL Green and KAISER

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

The idea behind SL Green Realty and KAISER FOUNDATION HOSPITALS 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.