Correlation Between SL Green and ChampionX
Can any of the company-specific risk be diversified away by investing in both SL Green and ChampionX 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 ChampionX 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 ChampionX, you can compare the effects of market volatilities on SL Green and ChampionX 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 ChampionX. Check out your portfolio center. Please also check ongoing floating volatility patterns of SL Green and ChampionX.
Diversification Opportunities for SL Green and ChampionX
Good diversification
The 3 months correlation between SLG and ChampionX is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and ChampionX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChampionX 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 ChampionX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChampionX has no effect on the direction of SL Green i.e., SL Green and ChampionX go up and down completely randomly.
Pair Corralation between SL Green and ChampionX
Considering the 90-day investment horizon SL Green Realty is expected to generate 1.52 times more return on investment than ChampionX. However, SL Green is 1.52 times more volatile than ChampionX. It trades about 0.08 of its potential returns per unit of risk. ChampionX is currently generating about 0.02 per unit of risk. If you would invest 2,993 in SL Green Realty on August 29, 2024 and sell it today you would earn a total of 4,824 from holding SL Green Realty or generate 161.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SL Green Realty vs. ChampionX
Performance |
| Timeline |
| SL Green Realty |
| ChampionX |
SL Green and ChampionX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SL Green and ChampionX
The main advantage of trading using opposite SL Green and ChampionX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SL Green position performs unexpectedly, ChampionX 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 ChampionX will offset losses from the drop in ChampionX'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 |
| ChampionX vs. ProPetro Holding Corp | ChampionX vs. RPC Inc | ChampionX vs. MRC Global | ChampionX vs. Expro Group Holdings |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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