Correlation Between SL Green and Brunswick

Can any of the company-specific risk be diversified away by investing in both SL Green and Brunswick 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 Brunswick 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 Brunswick, you can compare the effects of market volatilities on SL Green and Brunswick 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 Brunswick. Check out your portfolio center. Please also check ongoing floating volatility patterns of SL Green and Brunswick.

Diversification Opportunities for SL Green and Brunswick

-0.03

Correlation Coefficient

SL Green  Brunswick

Good diversification

The 3 months correlation between SLG and Brunswick is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and Brunswick in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick 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 Brunswick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunswick has no effect on the direction of SL Green i.e., SL Green and Brunswick go up and down completely randomly.

Pair Corralation between SL Green and Brunswick

Considering the 90-day investment horizon SL Green Realty is expected to generate 0.89 times more return on investment than Brunswick. However, SL Green Realty is 1.13 times less risky than Brunswick. It trades about 0.06 of its potential returns per unit of risk. Brunswick is currently generating about -0.09 per unit of risk. If you would invest  7,132  in SL Green Realty on September 18, 2024 and sell it today you would earn a total of  402.00  from holding SL Green Realty or generate 5.64% 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.  Brunswick

SL Green Realty

Risk-Adjusted Performance

4 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SL Green Realty are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, SL Green may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Brunswick

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brunswick has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with SL Green and Brunswick

The main advantage of trading using opposite SL Green and Brunswick positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SL Green position performs unexpectedly, Brunswick 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 Brunswick will offset losses from the drop in Brunswick's long position.

The idea behind SL Green Realty and Brunswick pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.