Correlation Between Prologis and SL Green

Can any of the company-specific risk be diversified away by investing in both Prologis and SL Green 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 Prologis and SL Green into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Prologis and SL Green Realty, you can compare the effects of market volatilities on Prologis and SL Green 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 Prologis with a short position of SL Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prologis and SL Green.

Diversification Opportunities for Prologis and SL Green

-0.13

Correlation Coefficient

Prologis  SL Green

Good diversification

The 3 months correlation between Prologis and SLG is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Prologis and SL Green Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SL Green Realty and Prologis 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 Prologis are associated (or correlated) with SL Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SL Green Realty has no effect on the direction of Prologis i.e., Prologis and SL Green go up and down completely randomly.

Pair Corralation between Prologis and SL Green

Considering the 90-day investment horizon Prologis is expected to under-perform the SL Green. But the stock apears to be less risky and, when comparing its historical volatility, Prologis is 1.59 times less risky than SL Green. The stock trades about -0.47 of its potential returns per unit of risk. The SL Green Realty is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  5,270  in SL Green Realty on January 20, 2024 and sell it today you would lose (418.00) from holding SL Green Realty or give up 7.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Prologis  vs.  SL Green Realty

Prologis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prologis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

SL Green Realty

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SL Green Realty are ranked lower than 3 (%) 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 May 2024.

Pair Trading with Prologis and SL Green

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

The idea behind Prologis and SL Green Realty 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.