Correlation Between SLR Investment and TPG
Can any of the company-specific risk be diversified away by investing in both SLR Investment and TPG 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 TPG 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 TPG Inc, you can compare the effects of market volatilities on SLR Investment and TPG 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 TPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and TPG.
Diversification Opportunities for SLR Investment and TPG
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SLR and TPG is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and TPG Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPG Inc 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 TPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPG Inc has no effect on the direction of SLR Investment i.e., SLR Investment and TPG go up and down completely randomly.
Pair Corralation between SLR Investment and TPG
Given the investment horizon of 90 days SLR Investment is expected to generate 2.19 times less return on investment than TPG. But when comparing it to its historical volatility, SLR Investment Corp is 2.13 times less risky than TPG. It trades about 0.07 of its potential returns per unit of risk. TPG Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,127 in TPG Inc on November 27, 2024 and sell it today you would earn a total of 2,489 from holding TPG Inc or generate 79.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. TPG Inc
Performance |
| Timeline |
| SLR Investment Corp |
| TPG Inc |
SLR Investment and TPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and TPG
The main advantage of trading using opposite SLR Investment and TPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, TPG 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 TPG will offset losses from the drop in TPG'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 |
| TPG vs. Ares Management LP | TPG vs. Patria Investments | TPG vs. Apollo Global Management | TPG vs. Cion Investment Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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