Correlation Between Perma-Fix Environmental and SLR Investment
Can any of the company-specific risk be diversified away by investing in both Perma-Fix Environmental 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 Perma-Fix Environmental and SLR Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perma Fix Environmental Services and SLR Investment Corp, you can compare the effects of market volatilities on Perma-Fix Environmental 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 Perma-Fix Environmental with a short position of SLR Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perma-Fix Environmental and SLR Investment.
Diversification Opportunities for Perma-Fix Environmental and SLR Investment
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Perma-Fix and SLR is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Perma Fix Environmental Servic 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 Perma-Fix Environmental 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 Perma Fix Environmental Services 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 Perma-Fix Environmental i.e., Perma-Fix Environmental and SLR Investment go up and down completely randomly.
Pair Corralation between Perma-Fix Environmental and SLR Investment
Assuming the 90 days trading horizon Perma Fix Environmental Services is expected to generate 3.0 times more return on investment than SLR Investment. However, Perma-Fix Environmental is 3.0 times more volatile than SLR Investment Corp. It trades about 0.08 of its potential returns per unit of risk. SLR Investment Corp is currently generating about 0.17 per unit of risk. If you would invest 955.00 in Perma Fix Environmental Services on September 12, 2024 and sell it today you would earn a total of 165.00 from holding Perma Fix Environmental Services or generate 17.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Perma Fix Environmental Servic vs. SLR Investment Corp
Performance |
| Timeline |
| Perma Fix Environmental |
| SLR Investment Corp |
Perma-Fix Environmental and SLR Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perma-Fix Environmental and SLR Investment
The main advantage of trading using opposite Perma-Fix Environmental and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perma-Fix Environmental 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.| Perma-Fix Environmental vs. Apple Inc | Perma-Fix Environmental vs. Apple Inc | Perma-Fix Environmental vs. Apple Inc | Perma-Fix Environmental vs. Apple Inc |
| SLR Investment vs. EVS Broadcast Equipment | SLR Investment vs. Summit Hotel Properties | SLR Investment vs. Park Hotels Resorts | SLR Investment vs. BROADSTNET LEADL 00025 |
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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