Correlation Between LION ONE and SLR Investment
Can any of the company-specific risk be diversified away by investing in both LION ONE 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 LION ONE and SLR Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LION ONE METALS and SLR Investment Corp, you can compare the effects of market volatilities on LION ONE 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 LION ONE with a short position of SLR Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and SLR Investment.
Diversification Opportunities for LION ONE and SLR Investment
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LION and SLR is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS 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 LION ONE 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 LION ONE METALS 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 LION ONE i.e., LION ONE and SLR Investment go up and down completely randomly.
Pair Corralation between LION ONE and SLR Investment
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the SLR Investment. In addition to that, LION ONE is 3.07 times more volatile than SLR Investment Corp. It trades about -0.21 of its total potential returns per unit of risk. SLR Investment Corp is currently generating about 0.23 per unit of volatility. If you would invest 1,501 in SLR Investment Corp on September 15, 2024 and sell it today you would earn a total of 108.00 from holding SLR Investment Corp or generate 7.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LION ONE METALS vs. SLR Investment Corp
Performance |
| Timeline |
| LION ONE METALS |
| SLR Investment Corp |
LION ONE and SLR Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and SLR Investment
The main advantage of trading using opposite LION ONE and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE 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.| LION ONE vs. Tyson Foods | LION ONE vs. Lendlease Group | LION ONE vs. Austevoll Seafood ASA | LION ONE vs. Sixt Leasing SE |
| SLR Investment vs. LION ONE METALS | SLR Investment vs. TAL Education Group | SLR Investment vs. Perdoceo Education | SLR Investment vs. Adtalem Global Education |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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