Correlation Between SL Green and Foraco International
Can any of the company-specific risk be diversified away by investing in both SL Green and Foraco International 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 Foraco International 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 Foraco International SA, you can compare the effects of market volatilities on SL Green and Foraco International 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 Foraco International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SL Green and Foraco International.
Diversification Opportunities for SL Green and Foraco International
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SLG and Foraco is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and Foraco International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foraco International 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 Foraco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foraco International has no effect on the direction of SL Green i.e., SL Green and Foraco International go up and down completely randomly.
Pair Corralation between SL Green and Foraco International
Considering the 90-day investment horizon SL Green Realty is expected to generate 1.2 times more return on investment than Foraco International. However, SL Green is 1.2 times more volatile than Foraco International SA. It trades about 0.07 of its potential returns per unit of risk. Foraco International SA is currently generating about 0.05 per unit of risk. 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 | Very Weak |
| Accuracy | 70.3% |
| Values | Daily Returns |
SL Green Realty vs. Foraco International SA
Performance |
| Timeline |
| SL Green Realty |
| Foraco International |
SL Green and Foraco International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SL Green and Foraco International
The main advantage of trading using opposite SL Green and Foraco International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SL Green position performs unexpectedly, Foraco International 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 Foraco International will offset losses from the drop in Foraco International'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 |
| Foraco International vs. Hudson Pacific Properties | Foraco International vs. SL Green Realty | Foraco International vs. Western Acquisition Ventures | Foraco International vs. Evertz Technologies Limited |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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