Correlation Between Mountain Crest and SL Green
Can any of the company-specific risk be diversified away by investing in both Mountain Crest 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 Mountain Crest and SL Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mountain Crest Acquisition and SL Green Realty, you can compare the effects of market volatilities on Mountain Crest 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 Mountain Crest with a short position of SL Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mountain Crest and SL Green.
Diversification Opportunities for Mountain Crest and SL Green
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mountain and SLG is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Mountain Crest Acquisition 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 Mountain Crest 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 Mountain Crest Acquisition 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 Mountain Crest i.e., Mountain Crest and SL Green go up and down completely randomly.
Pair Corralation between Mountain Crest and SL Green
Assuming the 90 days horizon Mountain Crest Acquisition is expected to under-perform the SL Green. But the stock apears to be less risky and, when comparing its historical volatility, Mountain Crest Acquisition is 2.18 times less risky than SL Green. The stock trades about -0.04 of its potential returns per unit of risk. The SL Green Realty is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,098 in SL Green Realty on September 3, 2024 and sell it today you would earn a total of 4,721 from holding SL Green Realty or generate 152.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 80.2% |
| Values | Daily Returns |
Mountain Crest Acquisition vs. SL Green Realty
Performance |
| Timeline |
| Mountain Crest Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SL Green Realty |
Mountain Crest and SL Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mountain Crest and SL Green
The main advantage of trading using opposite Mountain Crest and SL Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mountain Crest 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.| Mountain Crest vs. SL Green Realty | Mountain Crest vs. The Mosaic | Mountain Crest vs. Origin Materials | Mountain Crest vs. Hooker Furniture |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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