Correlation Between SL Green and Kingdee International
Can any of the company-specific risk be diversified away by investing in both SL Green and Kingdee 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 Kingdee 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 Kingdee International Software, you can compare the effects of market volatilities on SL Green and Kingdee 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 Kingdee International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SL Green and Kingdee International.
Diversification Opportunities for SL Green and Kingdee International
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SLG and Kingdee is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and Kingdee International Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingdee 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 Kingdee International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingdee International has no effect on the direction of SL Green i.e., SL Green and Kingdee International go up and down completely randomly.
Pair Corralation between SL Green and Kingdee International
Considering the 90-day investment horizon SL Green Realty is expected to generate 1.0 times more return on investment than Kingdee International. However, SL Green Realty is 1.0 times less risky than Kingdee International. It trades about 0.06 of its potential returns per unit of risk. Kingdee International Software is currently generating about -0.03 per unit of risk. If you would invest 3,221 in SL Green Realty on October 16, 2024 and sell it today you would earn a total of 3,110 from holding SL Green Realty or generate 96.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
SL Green Realty vs. Kingdee International Software
Performance |
| Timeline |
| SL Green Realty |
| Kingdee International |
SL Green and Kingdee International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SL Green and Kingdee International
The main advantage of trading using opposite SL Green and Kingdee International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SL Green position performs unexpectedly, Kingdee 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 Kingdee International will offset losses from the drop in Kingdee 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 |
| Kingdee International vs. Spectrum Brands Holdings | Kingdee International vs. Estee Lauder Companies | Kingdee International vs. Franklin Wireless Corp | Kingdee International vs. SL Green Realty |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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