Correlation Between SL Green and Hudson Pacific
Can any of the company-specific risk be diversified away by investing in both SL Green and Hudson Pacific 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 SL Green and Hudson Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SL Green Realty and Hudson Pacific Properties, you can compare the effects of market volatilities on SL Green and Hudson Pacific 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 SL Green with a short position of Hudson Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of SL Green and Hudson Pacific.
Diversification Opportunities for SL Green and Hudson Pacific
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SLG-PI and Hudson is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and Hudson Pacific Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Pacific Properties and SL Green 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 SL Green Realty are associated (or correlated) with Hudson Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Pacific Properties has no effect on the direction of SL Green i.e., SL Green and Hudson Pacific go up and down completely randomly.
Pair Corralation between SL Green and Hudson Pacific
Assuming the 90 days trading horizon SL Green Realty is expected to under-perform the Hudson Pacific. But the preferred stock apears to be less risky and, when comparing its historical volatility, SL Green Realty is 2.37 times less risky than Hudson Pacific. The preferred stock trades about -0.04 of its potential returns per unit of risk. The Hudson Pacific Properties is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,395 in Hudson Pacific Properties on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Hudson Pacific Properties or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SL Green Realty vs. Hudson Pacific Properties
Performance |
| Timeline |
| SL Green Realty |
| Hudson Pacific Properties |
SL Green and Hudson Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SL Green and Hudson Pacific
The main advantage of trading using opposite SL Green and Hudson Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SL Green position performs unexpectedly, Hudson Pacific 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 Hudson Pacific will offset losses from the drop in Hudson Pacific's long position.| SL Green vs. Vornado Realty Trust | SL Green vs. Vornado Realty Trust | SL Green vs. City Office REIT | SL Green vs. Vornado Realty Trust |
| Hudson Pacific vs. Vornado Realty Trust | Hudson Pacific vs. Vornado Realty Trust | Hudson Pacific vs. SL Green Realty | Hudson Pacific vs. Vornado Realty Trust |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |