Correlation Between SL Green and National Retail
Can any of the company-specific risk be diversified away by investing in both SL Green and National Retail 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 National Retail 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 National Retail Properties, you can compare the effects of market volatilities on SL Green and National Retail 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 National Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of SL Green and National Retail.
Diversification Opportunities for SL Green and National Retail
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SLG and National is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and National Retail Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Retail Prop 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 National Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Retail Prop has no effect on the direction of SL Green i.e., SL Green and National Retail go up and down completely randomly.
Pair Corralation between SL Green and National Retail
Considering the 90-day investment horizon SL Green Realty is expected to generate 1.29 times more return on investment than National Retail. However, SL Green is 1.29 times more volatile than National Retail Properties. It trades about 0.16 of its potential returns per unit of risk. National Retail Properties is currently generating about 0.05 per unit of risk. If you would invest 7,415 in SL Green Realty on September 2, 2024 and sell it today you would earn a total of 404.00 from holding SL Green Realty or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SL Green Realty vs. National Retail Properties
Performance |
| Timeline |
| SL Green Realty |
| National Retail Prop |
SL Green and National Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SL Green and National Retail
The main advantage of trading using opposite SL Green and National Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SL Green position performs unexpectedly, National Retail 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 National Retail will offset losses from the drop in National Retail'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 |
| National Retail vs. Acadia Realty Trust | National Retail vs. Federal Realty Investment | National Retail vs. Realty Income | National Retail vs. Whitestone REIT |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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