Correlation Between SLM Corp and Silvercrest Asset
Can any of the company-specific risk be diversified away by investing in both SLM Corp and Silvercrest Asset 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 Silvercrest Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SLM Corp and Silvercrest Asset Management, you can compare the effects of market volatilities on SLM Corp and Silvercrest Asset 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 Silvercrest Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLM Corp and Silvercrest Asset.
Diversification Opportunities for SLM Corp and Silvercrest Asset
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SLM and Silvercrest is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding SLM Corp and Silvercrest Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercrest Asset 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 Silvercrest Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercrest Asset has no effect on the direction of SLM Corp i.e., SLM Corp and Silvercrest Asset go up and down completely randomly.
Pair Corralation between SLM Corp and Silvercrest Asset
Considering the 90-day investment horizon SLM Corp is expected to generate 1.21 times more return on investment than Silvercrest Asset. However, SLM Corp is 1.21 times more volatile than Silvercrest Asset Management. It trades about 0.27 of its potential returns per unit of risk. Silvercrest Asset Management is currently generating about -0.08 per unit of risk. If you would invest 2,408 in SLM Corp on September 19, 2024 and sell it today you would earn a total of 371.00 from holding SLM Corp or generate 15.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLM Corp vs. Silvercrest Asset Management
Performance |
| Timeline |
| SLM Corp |
| Silvercrest Asset |
SLM Corp and Silvercrest Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLM Corp and Silvercrest Asset
The main advantage of trading using opposite SLM Corp and Silvercrest Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLM Corp position performs unexpectedly, Silvercrest Asset 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 Silvercrest Asset will offset losses from the drop in Silvercrest Asset's long position.The idea behind SLM Corp and Silvercrest Asset Management pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Silvercrest Asset vs. Brightsphere Investment Group | Silvercrest Asset vs. DWS Municipal Income | Silvercrest Asset vs. Blackrock Muni Intermediate | Silvercrest Asset vs. Blackrock Muniyield |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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