Correlation Between SL Green and GEN Restaurant
Can any of the company-specific risk be diversified away by investing in both SL Green and GEN Restaurant 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 GEN Restaurant 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 GEN Restaurant Group,, you can compare the effects of market volatilities on SL Green and GEN Restaurant 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 GEN Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of SL Green and GEN Restaurant.
Diversification Opportunities for SL Green and GEN Restaurant
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SLG and GEN is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and GEN Restaurant Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEN Restaurant Group, 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 GEN Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEN Restaurant Group, has no effect on the direction of SL Green i.e., SL Green and GEN Restaurant go up and down completely randomly.
Pair Corralation between SL Green and GEN Restaurant
Considering the 90-day investment horizon SL Green Realty is expected to generate 0.65 times more return on investment than GEN Restaurant. However, SL Green Realty is 1.54 times less risky than GEN Restaurant. It trades about 0.14 of its potential returns per unit of risk. GEN Restaurant Group, is currently generating about 0.02 per unit of risk. If you would invest 2,881 in SL Green Realty on September 4, 2024 and sell it today you would earn a total of 4,693 from holding SL Green Realty or generate 162.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SL Green Realty vs. GEN Restaurant Group,
Performance |
| Timeline |
| SL Green Realty |
| GEN Restaurant Group, |
SL Green and GEN Restaurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SL Green and GEN Restaurant
The main advantage of trading using opposite SL Green and GEN Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SL Green position performs unexpectedly, GEN Restaurant 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 GEN Restaurant will offset losses from the drop in GEN Restaurant'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 |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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