Correlation Between SL Green and Broadstone Net
Can any of the company-specific risk be diversified away by investing in both SL Green and Broadstone Net 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 Broadstone Net 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 Broadstone Net Lease, you can compare the effects of market volatilities on SL Green and Broadstone Net 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 Broadstone Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of SL Green and Broadstone Net.
Diversification Opportunities for SL Green and Broadstone Net
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SLG and Broadstone is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and Broadstone Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadstone Net Lease 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 Broadstone Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadstone Net Lease has no effect on the direction of SL Green i.e., SL Green and Broadstone Net go up and down completely randomly.
Pair Corralation between SL Green and Broadstone Net
Considering the 90-day investment horizon SL Green Realty is expected to generate 2.01 times more return on investment than Broadstone Net. However, SL Green is 2.01 times more volatile than Broadstone Net Lease. It trades about 0.0 of its potential returns per unit of risk. Broadstone Net Lease is currently generating about -0.08 per unit of risk. If you would invest 7,599 in SL Green Realty on September 4, 2024 and sell it today you would lose (25.00) from holding SL Green Realty or give up 0.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SL Green Realty vs. Broadstone Net Lease
Performance |
| Timeline |
| SL Green Realty |
| Broadstone Net Lease |
SL Green and Broadstone Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SL Green and Broadstone Net
The main advantage of trading using opposite SL Green and Broadstone Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SL Green position performs unexpectedly, Broadstone Net 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 Broadstone Net will offset losses from the drop in Broadstone Net's long position.| SL Green vs. Boston Properties | SL Green vs. Douglas Emmett | SL Green vs. Kilroy Realty Corp | SL Green vs. Alexandria Real Estate |
| Broadstone Net vs. Boston Properties | Broadstone Net vs. Douglas Emmett | Broadstone Net vs. Alexandria Real Estate | Broadstone Net 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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