Correlation Between SLR Investment and Cincinnati Financial
Can any of the company-specific risk be diversified away by investing in both SLR Investment and Cincinnati Financial 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 Cincinnati Financial 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 Cincinnati Financial, you can compare the effects of market volatilities on SLR Investment and Cincinnati Financial 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 Cincinnati Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Cincinnati Financial.
Diversification Opportunities for SLR Investment and Cincinnati Financial
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SLR and Cincinnati is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Cincinnati Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cincinnati Financial 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 Cincinnati Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cincinnati Financial has no effect on the direction of SLR Investment i.e., SLR Investment and Cincinnati Financial go up and down completely randomly.
Pair Corralation between SLR Investment and Cincinnati Financial
Given the investment horizon of 90 days SLR Investment Corp is expected to generate 0.67 times more return on investment than Cincinnati Financial. However, SLR Investment Corp is 1.49 times less risky than Cincinnati Financial. It trades about 0.06 of its potential returns per unit of risk. Cincinnati Financial is currently generating about 0.04 per unit of risk. If you would invest 1,273 in SLR Investment Corp on October 28, 2024 and sell it today you would earn a total of 396.00 from holding SLR Investment Corp or generate 31.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. Cincinnati Financial
Performance |
| Timeline |
| SLR Investment Corp |
| Cincinnati Financial |
SLR Investment and Cincinnati Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and Cincinnati Financial
The main advantage of trading using opposite SLR Investment and Cincinnati Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, Cincinnati Financial 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 Cincinnati Financial will offset losses from the drop in Cincinnati Financial'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 |
| Cincinnati Financial vs. Progressive Corp | Cincinnati Financial vs. The Travelers Companies | Cincinnati Financial vs. Chubb | Cincinnati Financial vs. W R Berkley |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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