Correlation Between VITEC SOFTWARE and SLR Investment
Can any of the company-specific risk be diversified away by investing in both VITEC SOFTWARE 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 VITEC SOFTWARE and SLR Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VITEC SOFTWARE GROUP and SLR Investment Corp, you can compare the effects of market volatilities on VITEC SOFTWARE 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 VITEC SOFTWARE with a short position of SLR Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of VITEC SOFTWARE and SLR Investment.
Diversification Opportunities for VITEC SOFTWARE and SLR Investment
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VITEC and SLR is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding VITEC SOFTWARE GROUP 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 VITEC SOFTWARE 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 VITEC SOFTWARE GROUP 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 VITEC SOFTWARE i.e., VITEC SOFTWARE and SLR Investment go up and down completely randomly.
Pair Corralation between VITEC SOFTWARE and SLR Investment
Assuming the 90 days horizon VITEC SOFTWARE GROUP is expected to generate 1.4 times more return on investment than SLR Investment. However, VITEC SOFTWARE is 1.4 times more volatile than SLR Investment Corp. It trades about 0.14 of its potential returns per unit of risk. SLR Investment Corp is currently generating about 0.12 per unit of risk. If you would invest 4,182 in VITEC SOFTWARE GROUP on September 12, 2024 and sell it today you would earn a total of 250.00 from holding VITEC SOFTWARE GROUP or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VITEC SOFTWARE GROUP vs. SLR Investment Corp
Performance |
| Timeline |
| VITEC SOFTWARE GROUP |
| SLR Investment Corp |
VITEC SOFTWARE and SLR Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VITEC SOFTWARE and SLR Investment
The main advantage of trading using opposite VITEC SOFTWARE and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VITEC SOFTWARE 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.| VITEC SOFTWARE vs. Suntory Beverage Food | VITEC SOFTWARE vs. ALEFARM BREWING DK 05 | VITEC SOFTWARE vs. National Beverage Corp | VITEC SOFTWARE 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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