Correlation Between American Public and SLR Investment
Can any of the company-specific risk be diversified away by investing in both American Public 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 American Public and SLR Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Public Education and SLR Investment Corp, you can compare the effects of market volatilities on American Public 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 American Public with a short position of SLR Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Public and SLR Investment.
Diversification Opportunities for American Public and SLR Investment
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and SLR is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding American Public Education 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 American Public 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 American Public Education 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 American Public i.e., American Public and SLR Investment go up and down completely randomly.
Pair Corralation between American Public and SLR Investment
Assuming the 90 days horizon American Public Education is expected to generate 4.2 times more return on investment than SLR Investment. However, American Public is 4.2 times more volatile than SLR Investment Corp. It trades about 0.05 of its potential returns per unit of risk. SLR Investment Corp is currently generating about 0.06 per unit of risk. If you would invest 1,140 in American Public Education on October 25, 2024 and sell it today you would earn a total of 920.00 from holding American Public Education or generate 80.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Public Education vs. SLR Investment Corp
Performance |
| Timeline |
| American Public Education |
| SLR Investment Corp |
American Public and SLR Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Public and SLR Investment
The main advantage of trading using opposite American Public and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Public 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.| American Public vs. IDP EDUCATION LTD | American Public vs. TAL Education Group | American Public vs. Grand Canyon Education | American Public vs. Graham Holdings Co |
| SLR Investment vs. FRACTAL GAMING GROUP | SLR Investment vs. Gaming and Leisure | SLR Investment vs. Fair Isaac Corp | SLR Investment vs. Wizz Air Holdings |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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