Correlation Between SLR Investment and Sun Life
Can any of the company-specific risk be diversified away by investing in both SLR Investment and Sun Life 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 Sun Life 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 Sun Life Financial, you can compare the effects of market volatilities on SLR Investment and Sun Life 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 Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Sun Life.
Diversification Opportunities for SLR Investment and Sun Life
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SLR and Sun is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life 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 Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of SLR Investment i.e., SLR Investment and Sun Life go up and down completely randomly.
Pair Corralation between SLR Investment and Sun Life
Given the investment horizon of 90 days SLR Investment Corp is expected to generate 0.79 times more return on investment than Sun Life. However, SLR Investment Corp is 1.27 times less risky than Sun Life. It trades about 0.12 of its potential returns per unit of risk. Sun Life Financial is currently generating about -0.11 per unit of risk. If you would invest 1,620 in SLR Investment Corp on October 28, 2024 and sell it today you would earn a total of 49.00 from holding SLR Investment Corp or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. Sun Life Financial
Performance |
| Timeline |
| SLR Investment Corp |
| Sun Life Financial |
SLR Investment and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and Sun Life
The main advantage of trading using opposite SLR Investment and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life'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 |
| Sun Life vs. Hartford Financial Services | Sun Life vs. Goosehead Insurance | Sun Life vs. International General Insurance | Sun Life vs. Enstar Group Limited |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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