Correlation Between LQR House and SL Green
Can any of the company-specific risk be diversified away by investing in both LQR House 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 LQR House and SL Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LQR House Common and SL Green Realty, you can compare the effects of market volatilities on LQR House 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 LQR House with a short position of SL Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of LQR House and SL Green.
Diversification Opportunities for LQR House and SL Green
Poor diversification
The 3 months correlation between LQR and SLG is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding LQR House Common 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 LQR House 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 LQR House Common 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 LQR House i.e., LQR House and SL Green go up and down completely randomly.
Pair Corralation between LQR House and SL Green
Considering the 90-day investment horizon LQR House Common is expected to under-perform the SL Green. In addition to that, LQR House is 3.16 times more volatile than SL Green Realty. It trades about -0.09 of its total potential returns per unit of risk. SL Green Realty is currently generating about 0.07 per unit of volatility. If you would invest 2,874 in SL Green Realty on September 12, 2024 and sell it today you would earn a total of 4,541 from holding SL Green Realty or generate 158.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 68.28% |
| Values | Daily Returns |
LQR House Common vs. SL Green Realty
Performance |
| Timeline |
| LQR House Common |
| SL Green Realty |
LQR House and SL Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LQR House and SL Green
The main advantage of trading using opposite LQR House and SL Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LQR House 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.| LQR House vs. Fresh Grapes LLC | LQR House vs. Eastside Distilling | LQR House vs. Willamette Valley Vineyards | LQR House vs. Diageo PLC ADR |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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