Correlation Between SL Green and Western Copper
Can any of the company-specific risk be diversified away by investing in both SL Green and Western Copper 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 Western Copper 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 Western Copper and, you can compare the effects of market volatilities on SL Green and Western Copper 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 Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of SL Green and Western Copper.
Diversification Opportunities for SL Green and Western Copper
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between SLG and Western is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper 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 Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of SL Green i.e., SL Green and Western Copper go up and down completely randomly.
Pair Corralation between SL Green and Western Copper
Considering the 90-day investment horizon SL Green Realty is expected to generate 1.04 times more return on investment than Western Copper. However, SL Green is 1.04 times more volatile than Western Copper and. It trades about 0.13 of its potential returns per unit of risk. Western Copper and is currently generating about -0.02 per unit of risk. If you would invest 1,921 in SL Green Realty on August 26, 2024 and sell it today you would earn a total of 6,042 from holding SL Green Realty or generate 314.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SL Green Realty vs. Western Copper and
Performance |
| Timeline |
| SL Green Realty |
| Western Copper |
SL Green and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SL Green and Western Copper
The main advantage of trading using opposite SL Green and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SL Green position performs unexpectedly, Western Copper 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 Western Copper will offset losses from the drop in Western Copper's long position.| SL Green vs. Boston Properties | SL Green vs. Alexandria Real Estate | SL Green vs. Highwoods Properties | SL Green vs. Hudson Pacific Properties |
| Western Copper vs. Vale SA ADR | Western Copper vs. Teck Resources Ltd | Western Copper vs. MP Materials Corp | Western Copper vs. BHP Group 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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