Correlation Between SL Green and Tyson Foods
Can any of the company-specific risk be diversified away by investing in both SL Green and Tyson Foods 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 Tyson Foods 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 Tyson Foods, you can compare the effects of market volatilities on SL Green and Tyson Foods 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 Tyson Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of SL Green and Tyson Foods.
Diversification Opportunities for SL Green and Tyson Foods
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SLG and Tyson is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and Tyson Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tyson Foods 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 Tyson Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tyson Foods has no effect on the direction of SL Green i.e., SL Green and Tyson Foods go up and down completely randomly.
Pair Corralation between SL Green and Tyson Foods
Considering the 90-day investment horizon SL Green Realty is expected to generate 1.84 times more return on investment than Tyson Foods. However, SL Green is 1.84 times more volatile than Tyson Foods. It trades about 0.13 of its potential returns per unit of risk. Tyson Foods is currently generating about 0.08 per unit of risk. If you would invest 3,261 in SL Green Realty on September 14, 2024 and sell it today you would earn a total of 4,206 from holding SL Green Realty or generate 128.98% 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. Tyson Foods
Performance |
| Timeline |
| SL Green Realty |
| Tyson Foods |
SL Green and Tyson Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SL Green and Tyson Foods
The main advantage of trading using opposite SL Green and Tyson Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SL Green position performs unexpectedly, Tyson Foods 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 Tyson Foods will offset losses from the drop in Tyson Foods' long position.| SL Green vs. Boston Properties | SL Green vs. Douglas Emmett | SL Green vs. Kilroy Realty Corp | SL Green vs. Alexandria Real Estate |
| Tyson Foods vs. Bunge Limited | Tyson Foods vs. Cal Maine Foods | Tyson Foods vs. Dole PLC | Tyson Foods vs. Adecoagro SA |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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