Correlation Between Postal Savings and SLR Investment
Can any of the company-specific risk be diversified away by investing in both Postal Savings and SLR Investment 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 Postal Savings and SLR Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Postal Savings Bank and SLR Investment Corp, you can compare the effects of market volatilities on Postal Savings and SLR Investment 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 Postal Savings with a short position of SLR Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Savings and SLR Investment.
Diversification Opportunities for Postal Savings and SLR Investment
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Postal and SLR is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Postal Savings Bank and SLR Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLR Investment Corp and Postal Savings 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 Postal Savings Bank are associated (or correlated) with SLR Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLR Investment Corp has no effect on the direction of Postal Savings i.e., Postal Savings and SLR Investment go up and down completely randomly.
Pair Corralation between Postal Savings and SLR Investment
Assuming the 90 days horizon Postal Savings is expected to generate 27.18 times less return on investment than SLR Investment. But when comparing it to its historical volatility, Postal Savings Bank is 1.05 times less risky than SLR Investment. It trades about 0.01 of its potential returns per unit of risk. SLR Investment Corp is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,427 in SLR Investment Corp on August 30, 2024 and sell it today you would earn a total of 152.00 from holding SLR Investment Corp or generate 10.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Postal Savings Bank vs. SLR Investment Corp
Performance |
| Timeline |
| Postal Savings Bank |
| SLR Investment Corp |
Postal Savings and SLR Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postal Savings and SLR Investment
The main advantage of trading using opposite Postal Savings and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Savings position performs unexpectedly, SLR Investment 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 SLR Investment will offset losses from the drop in SLR Investment's long position.| Postal Savings vs. Perdoceo Education | Postal Savings vs. STRAYER EDUCATION | Postal Savings vs. Costco Wholesale Corp | Postal Savings vs. Tsingtao Brewery |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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