Correlation Between SLM Corp and Credit Acceptance
Can any of the company-specific risk be diversified away by investing in both SLM Corp and Credit Acceptance 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 SLM Corp and Credit Acceptance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SLM Corp and Credit Acceptance, you can compare the effects of market volatilities on SLM Corp and Credit Acceptance 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 SLM Corp with a short position of Credit Acceptance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLM Corp and Credit Acceptance.
Diversification Opportunities for SLM Corp and Credit Acceptance
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between SLM and Credit is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding SLM Corp and Credit Acceptance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Acceptance and SLM Corp 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 SLM Corp are associated (or correlated) with Credit Acceptance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Acceptance has no effect on the direction of SLM Corp i.e., SLM Corp and Credit Acceptance go up and down completely randomly.
Pair Corralation between SLM Corp and Credit Acceptance
Considering the 90-day investment horizon SLM Corp is expected to generate 1.24 times more return on investment than Credit Acceptance. However, SLM Corp is 1.24 times more volatile than Credit Acceptance. It trades about 0.12 of its potential returns per unit of risk. Credit Acceptance is currently generating about -0.04 per unit of risk. If you would invest 2,303 in SLM Corp on August 23, 2024 and sell it today you would earn a total of 183.00 from holding SLM Corp or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLM Corp vs. Credit Acceptance
Performance |
| Timeline |
| SLM Corp |
| Credit Acceptance |
SLM Corp and Credit Acceptance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLM Corp and Credit Acceptance
The main advantage of trading using opposite SLM Corp and Credit Acceptance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLM Corp position performs unexpectedly, Credit Acceptance 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 Credit Acceptance will offset losses from the drop in Credit Acceptance's long position.| SLM Corp vs. Small Cap Core | SLM Corp vs. Morningstar Unconstrained Allocation | SLM Corp vs. Mutual Of America | SLM Corp vs. Ep Emerging Markets |
| Credit Acceptance vs. World Acceptance | Credit Acceptance vs. FirstCash | Credit Acceptance vs. Dorman Products | Credit Acceptance vs. Encore Capital Group |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |