Correlation Between SLR Investment and BBB Foods
Can any of the company-specific risk be diversified away by investing in both SLR Investment and BBB Foods 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 BBB Foods 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 BBB Foods, you can compare the effects of market volatilities on SLR Investment and BBB Foods 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 BBB Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and BBB Foods.
Diversification Opportunities for SLR Investment and BBB Foods
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SLR and BBB is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and BBB Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBB Foods 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 BBB Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBB Foods has no effect on the direction of SLR Investment i.e., SLR Investment and BBB Foods go up and down completely randomly.
Pair Corralation between SLR Investment and BBB Foods
Given the investment horizon of 90 days SLR Investment Corp is expected to generate 0.22 times more return on investment than BBB Foods. However, SLR Investment Corp is 4.48 times less risky than BBB Foods. It trades about 0.1 of its potential returns per unit of risk. BBB Foods is currently generating about -0.02 per unit of risk. If you would invest 1,599 in SLR Investment Corp on October 17, 2024 and sell it today you would earn a total of 42.00 from holding SLR Investment Corp or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.44% |
| Values | Daily Returns |
SLR Investment Corp vs. BBB Foods
Performance |
| Timeline |
| SLR Investment Corp |
| BBB Foods |
SLR Investment and BBB Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and BBB Foods
The main advantage of trading using opposite SLR Investment and BBB Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, BBB Foods 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 BBB Foods will offset losses from the drop in BBB Foods' long position.| SLR Investment vs. Horizon Technology Finance | SLR Investment vs. WhiteHorse Finance | SLR Investment vs. Gladstone Capital | SLR Investment vs. PennantPark Floating Rate |
| BBB Foods vs. Omni Health | BBB Foods vs. SLR Investment Corp | BBB Foods vs. RadNet Inc | BBB Foods vs. Merit Medical Systems |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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