Correlation Between Vornado Realty and SuRo Capital

Can any of the company-specific risk be diversified away by investing in both Vornado Realty and SuRo Capital 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 Vornado Realty and SuRo Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vornado Realty Trust and SuRo Capital Corp, you can compare the effects of market volatilities on Vornado Realty and SuRo Capital 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 Vornado Realty with a short position of SuRo Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vornado Realty and SuRo Capital.

Diversification Opportunities for Vornado Realty and SuRo Capital

-0.53

Correlation Coefficient

Vornado Realty  SuRo Capital

Excellent diversification

The 3 months correlation between Vornado and SuRo is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Vornado Realty Trust and SuRo Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SuRo Capital Corp and Vornado Realty 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 Vornado Realty Trust are associated (or correlated) with SuRo Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SuRo Capital Corp has no effect on the direction of Vornado Realty i.e., Vornado Realty and SuRo Capital go up and down completely randomly.

Pair Corralation between Vornado Realty and SuRo Capital

Assuming the 90 days trading horizon Vornado Realty Trust is expected to generate 3.13 times more return on investment than SuRo Capital. However, Vornado Realty is 3.13 times more volatile than SuRo Capital Corp. It trades about 0.04 of its potential returns per unit of risk. SuRo Capital Corp is currently generating about 0.07 per unit of risk. If you would invest  1,376  in Vornado Realty Trust on September 24, 2024 and sell it today you would earn a total of  366.00  from holding Vornado Realty Trust or generate 26.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Vornado Realty Trust  vs.  SuRo Capital Corp

Vornado Realty Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vornado Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Vornado Realty is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

SuRo Capital Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SuRo Capital Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, SuRo Capital is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Vornado Realty and SuRo Capital

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

The idea behind Vornado Realty Trust and SuRo Capital Corp 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.