Correlation Between SL Green and Wheeler Real

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

Diversification Opportunities for SL Green and Wheeler Real

0.73

Correlation Coefficient

SL Green  Wheeler Real

Poor diversification

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

Pair Corralation between SL Green and Wheeler Real

Considering the 90-day investment horizon SL Green Realty is expected to generate 0.2 times more return on investment than Wheeler Real. However, SL Green Realty is 5.06 times less risky than Wheeler Real. It trades about -0.07 of its potential returns per unit of risk. Wheeler Real Estate is currently generating about -0.39 per unit of risk. If you would invest  6,546  in SL Green Realty on December 27, 2024 and sell it today you would lose (632.00) from holding SL Green Realty or give up 9.65% of portfolio value over 90 days.

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

SL Green Realty  vs.  Wheeler Real Estate

SL Green Realty

Risk-Adjusted Performance

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 latest weak performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Wheeler Real Estate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wheeler Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in April 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 Wheeler Real

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

The idea behind SL Green Realty and Wheeler Real Estate 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.