Correlation Between SL Green and Hooker Furniture
Can any of the company-specific risk be diversified away by investing in both SL Green and Hooker Furniture 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 Hooker Furniture 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 Hooker Furniture, you can compare the effects of market volatilities on SL Green and Hooker Furniture 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 Hooker Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of SL Green and Hooker Furniture.
Diversification Opportunities for SL Green and Hooker Furniture
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SLG and Hooker is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and Hooker Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hooker Furniture 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 Hooker Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hooker Furniture has no effect on the direction of SL Green i.e., SL Green and Hooker Furniture go up and down completely randomly.
Pair Corralation between SL Green and Hooker Furniture
Considering the 90-day investment horizon SL Green Realty is expected to generate 0.94 times more return on investment than Hooker Furniture. However, SL Green Realty is 1.07 times less risky than Hooker Furniture. It trades about 0.01 of its potential returns per unit of risk. Hooker Furniture is currently generating about -0.38 per unit of risk. If you would invest 5,147 in SL Green Realty on February 3, 2024 and sell it today you would lose (4.00) from holding SL Green Realty or give up 0.08% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SL Green Realty vs. Hooker Furniture
Performance |
Timeline |
SL Green Realty |
Hooker Furniture |
SL Green and Hooker Furniture Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SL Green and Hooker Furniture
The main advantage of trading using opposite SL Green and Hooker Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SL Green position performs unexpectedly, Hooker Furniture 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 Hooker Furniture will offset losses from the drop in Hooker Furniture's long position.SL Green vs. Kilroy Realty Corp | SL Green vs. Hudson Pacific Properties | SL Green vs. Piedmont Office Realty | SL Green vs. Equity Commonwealth |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |