Correlation Between Hafnia and SL Green
Can any of the company-specific risk be diversified away by investing in both Hafnia 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 Hafnia and SL Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hafnia Limited and SL Green Realty, you can compare the effects of market volatilities on Hafnia 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 Hafnia with a short position of SL Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hafnia and SL Green.
Diversification Opportunities for Hafnia and SL Green
Pay attention - limited upside
The 3 months correlation between Hafnia and SLG is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hafnia Limited 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 Hafnia 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 Hafnia Limited 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 Hafnia i.e., Hafnia and SL Green go up and down completely randomly.
Pair Corralation between Hafnia and SL Green
Given the investment horizon of 90 days Hafnia is expected to generate 1.95 times less return on investment than SL Green. But when comparing it to its historical volatility, Hafnia Limited is 1.15 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 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,112 in SL Green Realty on September 4, 2024 and sell it today you would earn a total of 4,462 from holding SL Green Realty or generate 143.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 80.2% |
| Values | Daily Returns |
Hafnia Limited vs. SL Green Realty
Performance |
| Timeline |
| Hafnia Limited |
| SL Green Realty |
Hafnia and SL Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hafnia and SL Green
The main advantage of trading using opposite Hafnia and SL Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hafnia 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.| Hafnia vs. Axalta Coating Systems | Hafnia vs. NL Industries | Hafnia vs. Chemours Co | Hafnia vs. CVR Partners LP |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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