Correlation Between Highway Holdings and SL Green
Can any of the company-specific risk be diversified away by investing in both Highway Holdings 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 Highway Holdings and SL Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highway Holdings Limited and SL Green Realty, you can compare the effects of market volatilities on Highway Holdings 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 Highway Holdings with a short position of SL Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and SL Green.
Diversification Opportunities for Highway Holdings and SL Green
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Highway and SLG is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings 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 Highway Holdings 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 Highway Holdings 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 Highway Holdings i.e., Highway Holdings and SL Green go up and down completely randomly.
Pair Corralation between Highway Holdings and SL Green
Given the investment horizon of 90 days Highway Holdings Limited is expected to under-perform the SL Green. But the stock apears to be less risky and, when comparing its historical volatility, Highway Holdings Limited is 1.15 times less risky than SL Green. The stock trades about 0.0 of its potential returns per unit of risk. The SL Green Realty is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,705 in SL Green Realty on January 11, 2025 and sell it today you would earn a total of 2,030 from holding SL Green Realty or generate 75.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.62% |
| Values | Daily Returns |
Highway Holdings Limited vs. SL Green Realty
Performance |
| Timeline |
| Highway Holdings |
| SL Green Realty |
Highway Holdings and SL Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and SL Green
The main advantage of trading using opposite Highway Holdings and SL Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings 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.| Highway Holdings vs. Northwest Pipe | Highway Holdings vs. Ryerson Holding Corp | Highway Holdings vs. Allegheny Technologies Incorporated | Highway Holdings vs. Worthington Industries |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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