Correlation Between Cousins Properties and SL Green
Can any of the company-specific risk be diversified away by investing in both Cousins Properties and SL Green 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 Cousins Properties and SL Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cousins Properties Incorporated and SL Green Realty, you can compare the effects of market volatilities on Cousins Properties 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 Cousins Properties with a short position of SL Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cousins Properties and SL Green.
Diversification Opportunities for Cousins Properties and SL Green
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cousins and SLG is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Cousins Properties Incorporate 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 Cousins Properties 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 Cousins Properties Incorporated 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 Cousins Properties i.e., Cousins Properties and SL Green go up and down completely randomly.
Pair Corralation between Cousins Properties and SL Green
Considering the 90-day investment horizon Cousins Properties is expected to generate 1.54 times less return on investment than SL Green. But when comparing it to its historical volatility, Cousins Properties Incorporated is 1.43 times less risky than SL Green. It trades about 0.08 of its potential returns per unit of risk. SL Green Realty is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,220 in SL Green Realty on November 9, 2024 and sell it today you would earn a total of 2,457 from holding SL Green Realty or generate 58.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cousins Properties Incorporate vs. SL Green Realty
Performance |
| Timeline |
| Cousins Properties |
| SL Green Realty |
Cousins Properties and SL Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cousins Properties and SL Green
The main advantage of trading using opposite Cousins Properties and SL Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cousins Properties 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.| Cousins Properties vs. Highwoods Properties | Cousins Properties vs. Douglas Emmett | Cousins Properties vs. Equity Commonwealth | Cousins Properties vs. Kilroy Realty Corp |
| SL Green vs. Boston Properties | SL Green vs. Douglas Emmett | SL Green vs. Kilroy Realty Corp | SL Green vs. Alexandria Real Estate |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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