Correlation Between Japan Real and SL Green
Can any of the company-specific risk be diversified away by investing in both Japan Real 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 Japan Real and SL Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Real Estate and SL Green Realty, you can compare the effects of market volatilities on Japan Real 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 Japan Real with a short position of SL Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Real and SL Green.
Diversification Opportunities for Japan Real and SL Green
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Japan and GEI is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Japan Real Estate 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 Japan Real 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 Japan Real Estate 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 Japan Real i.e., Japan Real and SL Green go up and down completely randomly.
Pair Corralation between Japan Real and SL Green
Assuming the 90 days horizon Japan Real Estate is expected to generate 0.48 times more return on investment than SL Green. However, Japan Real Estate is 2.08 times less risky than SL Green. It trades about -0.25 of its potential returns per unit of risk. SL Green Realty is currently generating about -0.19 per unit of risk. If you would invest 68,000 in Japan Real Estate on October 26, 2024 and sell it today you would lose (6,500) from holding Japan Real Estate or give up 9.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Real Estate vs. SL Green Realty
Performance |
| Timeline |
| Japan Real Estate |
| SL Green Realty |
Japan Real and SL Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Real and SL Green
The main advantage of trading using opposite Japan Real and SL Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Real 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.| Japan Real vs. Agilent Technologies | Japan Real vs. Uber Technologies | Japan Real vs. URBAN OUTFITTERS | Japan Real vs. RYU Apparel |
| SL Green vs. Digital Realty Trust | SL Green vs. Gecina SA | SL Green vs. Japan Real Estate | SL Green vs. ORIX JREIT INC |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |