Correlation Between SLR Investment and Aegon NV
Can any of the company-specific risk be diversified away by investing in both SLR Investment and Aegon NV 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 SLR Investment and Aegon NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SLR Investment Corp and Aegon NV ADR, you can compare the effects of market volatilities on SLR Investment and Aegon NV 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 SLR Investment with a short position of Aegon NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Aegon NV.
Diversification Opportunities for SLR Investment and Aegon NV
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SLR and Aegon is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Aegon NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon NV ADR and SLR Investment 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 SLR Investment Corp are associated (or correlated) with Aegon NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegon NV ADR has no effect on the direction of SLR Investment i.e., SLR Investment and Aegon NV go up and down completely randomly.
Pair Corralation between SLR Investment and Aegon NV
Given the investment horizon of 90 days SLR Investment is expected to generate 1.01 times less return on investment than Aegon NV. But when comparing it to its historical volatility, SLR Investment Corp is 1.57 times less risky than Aegon NV. It trades about 0.06 of its potential returns per unit of risk. Aegon NV ADR is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 478.00 in Aegon NV ADR on October 14, 2024 and sell it today you would earn a total of 116.00 from holding Aegon NV ADR or generate 24.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. Aegon NV ADR
Performance |
| Timeline |
| SLR Investment Corp |
| Aegon NV ADR |
SLR Investment and Aegon NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and Aegon NV
The main advantage of trading using opposite SLR Investment and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, Aegon NV 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 Aegon NV will offset losses from the drop in Aegon NV's long position.| SLR Investment vs. Horizon Technology Finance | SLR Investment vs. WhiteHorse Finance | SLR Investment vs. Gladstone Capital | SLR Investment vs. PennantPark Floating Rate |
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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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