Correlation Between Nelnet and SLM Corp
Can any of the company-specific risk be diversified away by investing in both Nelnet and SLM Corp 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 Nelnet and SLM Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nelnet Inc and SLM Corp Pb, you can compare the effects of market volatilities on Nelnet and SLM Corp 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 Nelnet with a short position of SLM Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nelnet and SLM Corp.
Diversification Opportunities for Nelnet and SLM Corp
Good diversification
The 3 months correlation between Nelnet and SLM is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Nelnet Inc and SLM Corp Pb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLM Corp Pb and Nelnet 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 Nelnet Inc are associated (or correlated) with SLM Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLM Corp Pb has no effect on the direction of Nelnet i.e., Nelnet and SLM Corp go up and down completely randomly.
Pair Corralation between Nelnet and SLM Corp
Considering the 90-day investment horizon Nelnet is expected to generate 2.52 times less return on investment than SLM Corp. In addition to that, Nelnet is 1.33 times more volatile than SLM Corp Pb. It trades about 0.03 of its total potential returns per unit of risk. SLM Corp Pb is currently generating about 0.09 per unit of volatility. If you would invest 4,763 in SLM Corp Pb on August 27, 2024 and sell it today you would earn a total of 2,728 from holding SLM Corp Pb or generate 57.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nelnet Inc vs. SLM Corp Pb
Performance |
| Timeline |
| Nelnet Inc |
| SLM Corp Pb |
Nelnet and SLM Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nelnet and SLM Corp
The main advantage of trading using opposite Nelnet and SLM Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nelnet position performs unexpectedly, SLM Corp 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 SLM Corp will offset losses from the drop in SLM Corp's long position.| Nelnet vs. SLM Corp Pb | Nelnet vs. FirstCash | Nelnet vs. Navient Corp | Nelnet vs. Federal Agricultural Mortgage |
| SLM Corp vs. Associates First Capital | SLM Corp vs. Federal Agricultural Mortgage | SLM Corp vs. Federal Agricultural Mortgage | SLM Corp vs. Federal Agricultural Mortgage |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |