Correlation Between Topaz and SL Green
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By analyzing existing cross correlation between Topaz Solar Farms and SL Green Realty, you can compare the effects of market volatilities on Topaz and SL Green 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 Topaz with a short position of SL Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Topaz and SL Green.
Diversification Opportunities for Topaz and SL Green
Poor diversification
The 3 months correlation between Topaz and SLG is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Topaz Solar Farms and SL Green Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SL Green Realty and Topaz 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 Topaz Solar Farms are associated (or correlated) with SL Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SL Green Realty has no effect on the direction of Topaz i.e., Topaz and SL Green go up and down completely randomly.
Pair Corralation between Topaz and SL Green
Assuming the 90 days trading horizon Topaz Solar Farms is expected to generate 0.2 times more return on investment than SL Green. However, Topaz Solar Farms is 4.93 times less risky than SL Green. It trades about -0.04 of its potential returns per unit of risk. SL Green Realty is currently generating about -0.09 per unit of risk. If you would invest 9,756 in Topaz Solar Farms on December 29, 2024 and sell it today you would lose (62.00) from holding Topaz Solar Farms or give up 0.64% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 60.66% |
Values | Daily Returns |
Topaz Solar Farms vs. SL Green Realty
Performance |
Timeline |
Topaz Solar Farms |
SL Green Realty |
Topaz and SL Green Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Topaz and SL Green
The main advantage of trading using opposite Topaz and SL Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Topaz position performs unexpectedly, SL Green 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 SL Green will offset losses from the drop in SL Green's long position.The idea behind Topaz Solar Farms and SL Green Realty 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.SL Green vs. Douglas Emmett | SL Green vs. Alexandria Real Estate | SL Green vs. Vornado Realty Trust | SL Green vs. Highwoods Properties |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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