Correlation Between SLR Investment and New Mountain
Can any of the company-specific risk be diversified away by investing in both SLR Investment and New Mountain 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 New Mountain 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 New Mountain Finance, you can compare the effects of market volatilities on SLR Investment and New Mountain 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 New Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and New Mountain.
Diversification Opportunities for SLR Investment and New Mountain
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SLR and New is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and New Mountain Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Mountain Finance 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 New Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Mountain Finance has no effect on the direction of SLR Investment i.e., SLR Investment and New Mountain go up and down completely randomly.
Pair Corralation between SLR Investment and New Mountain
Given the investment horizon of 90 days SLR Investment Corp is expected to generate 0.81 times more return on investment than New Mountain. However, SLR Investment Corp is 1.24 times less risky than New Mountain. It trades about 0.25 of its potential returns per unit of risk. New Mountain Finance is currently generating about 0.11 per unit of risk. If you would invest 1,557 in SLR Investment Corp on August 29, 2024 and sell it today you would earn a total of 98.00 from holding SLR Investment Corp or generate 6.29% 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. New Mountain Finance
Performance |
| Timeline |
| SLR Investment Corp |
| New Mountain Finance |
SLR Investment and New Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and New Mountain
The main advantage of trading using opposite SLR Investment and New Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, New Mountain 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 New Mountain will offset losses from the drop in New Mountain'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 |
| New Mountain vs. BlackRock TCP Capital | New Mountain vs. Carlyle Secured Lending | New Mountain vs. Sixth Street Specialty | New Mountain vs. WhiteHorse Finance |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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