Correlation Between Highwoods Properties and SL Green
Can any of the company-specific risk be diversified away by investing in both Highwoods 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 Highwoods 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 Highwoods Properties and SL Green Realty, you can compare the effects of market volatilities on Highwoods 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 Highwoods Properties with a short position of SL Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highwoods Properties and SL Green.
Diversification Opportunities for Highwoods Properties and SL Green
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Highwoods and SLG is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Highwoods Properties 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 Highwoods 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 Highwoods Properties 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 Highwoods Properties i.e., Highwoods Properties and SL Green go up and down completely randomly.
Pair Corralation between Highwoods Properties and SL Green
Considering the 90-day investment horizon Highwoods Properties is expected to under-perform the SL Green. But the stock apears to be less risky and, when comparing its historical volatility, Highwoods Properties is 1.51 times less risky than SL Green. The stock trades about -0.36 of its potential returns per unit of risk. The SL Green Realty is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 7,534 in SL Green Realty on August 24, 2024 and sell it today you would earn a total of 381.00 from holding SL Green Realty or generate 5.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highwoods Properties vs. SL Green Realty
Performance |
| Timeline |
| Highwoods Properties |
| SL Green Realty |
Highwoods Properties and SL Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highwoods Properties and SL Green
The main advantage of trading using opposite Highwoods Properties and SL Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highwoods 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.| Highwoods Properties vs. Piedmont Office Realty | Highwoods Properties vs. Douglas Emmett | Highwoods Properties vs. Kilroy Realty Corp | Highwoods Properties vs. Hudson Pacific Properties |
| SL Green vs. Douglas Emmett | SL Green vs. Piedmont Office Realty | SL Green vs. City Office | SL Green vs. Cousins Properties Incorporated |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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