Correlation Between SLR Investment and BlackRock TCP
Can any of the company-specific risk be diversified away by investing in both SLR Investment and BlackRock TCP 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 BlackRock TCP 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 BlackRock TCP Capital, you can compare the effects of market volatilities on SLR Investment and BlackRock TCP 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 BlackRock TCP. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and BlackRock TCP.
Diversification Opportunities for SLR Investment and BlackRock TCP
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SLR and BlackRock is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and BlackRock TCP Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock TCP Capital 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 BlackRock TCP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock TCP Capital has no effect on the direction of SLR Investment i.e., SLR Investment and BlackRock TCP go up and down completely randomly.
Pair Corralation between SLR Investment and BlackRock TCP
Given the investment horizon of 90 days SLR Investment is expected to generate 1.71 times less return on investment than BlackRock TCP. But when comparing it to its historical volatility, SLR Investment Corp is 2.18 times less risky than BlackRock TCP. It trades about 0.25 of its potential returns per unit of risk. BlackRock TCP Capital is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 831.00 in BlackRock TCP Capital on August 29, 2024 and sell it today you would earn a total of 88.00 from holding BlackRock TCP Capital or generate 10.59% 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. BlackRock TCP Capital
Performance |
| Timeline |
| SLR Investment Corp |
| BlackRock TCP Capital |
SLR Investment and BlackRock TCP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and BlackRock TCP
The main advantage of trading using opposite SLR Investment and BlackRock TCP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, BlackRock TCP 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 BlackRock TCP will offset losses from the drop in BlackRock TCP'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 |
| BlackRock TCP vs. Aurora Innovation | BlackRock TCP vs. HUMANA INC | BlackRock TCP vs. Aquagold International | BlackRock TCP vs. Barloworld Ltd ADR |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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