Correlation Between SL Green and Bridgetown Holdings
Can any of the company-specific risk be diversified away by investing in both SL Green and Bridgetown Holdings 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 Bridgetown Holdings 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 Bridgetown Holdings, you can compare the effects of market volatilities on SL Green and Bridgetown Holdings 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 Bridgetown Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SL Green and Bridgetown Holdings.
Diversification Opportunities for SL Green and Bridgetown Holdings
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SLG and Bridgetown is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and Bridgetown Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgetown Holdings 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 Bridgetown Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgetown Holdings has no effect on the direction of SL Green i.e., SL Green and Bridgetown Holdings go up and down completely randomly.
Pair Corralation between SL Green and Bridgetown Holdings
Considering the 90-day investment horizon SL Green is expected to generate 3.04 times less return on investment than Bridgetown Holdings. But when comparing it to its historical volatility, SL Green Realty is 3.98 times less risky than Bridgetown Holdings. It trades about 0.06 of its potential returns per unit of risk. Bridgetown Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 21.00 in Bridgetown Holdings on October 11, 2024 and sell it today you would earn a total of 0.00 from holding Bridgetown Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 25.6% |
| Values | Daily Returns |
SL Green Realty vs. Bridgetown Holdings
Performance |
| Timeline |
| SL Green Realty |
| Bridgetown Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SL Green and Bridgetown Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SL Green and Bridgetown Holdings
The main advantage of trading using opposite SL Green and Bridgetown Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SL Green position performs unexpectedly, Bridgetown Holdings 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 Bridgetown Holdings will offset losses from the drop in Bridgetown Holdings' long position.| SL Green vs. Boston Properties | SL Green vs. Douglas Emmett | SL Green vs. Kilroy Realty Corp | SL Green vs. Alexandria Real Estate |
| Bridgetown Holdings vs. Astral Foods Limited | Bridgetown Holdings vs. SL Green Realty | Bridgetown Holdings vs. Rocky Mountain Chocolate | Bridgetown Holdings vs. Kellanova |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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