Correlation Between SLR Investment and MDJM
Can any of the company-specific risk be diversified away by investing in both SLR Investment and MDJM 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 MDJM 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 MDJM, you can compare the effects of market volatilities on SLR Investment and MDJM 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 MDJM. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and MDJM.
Diversification Opportunities for SLR Investment and MDJM
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SLR and MDJM is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and MDJM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MDJM 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 MDJM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MDJM has no effect on the direction of SLR Investment i.e., SLR Investment and MDJM go up and down completely randomly.
Pair Corralation between SLR Investment and MDJM
Given the investment horizon of 90 days SLR Investment is expected to generate 9.48 times less return on investment than MDJM. But when comparing it to its historical volatility, SLR Investment Corp is 17.31 times less risky than MDJM. It trades about 0.12 of its potential returns per unit of risk. MDJM is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 16.00 in MDJM on October 28, 2024 and sell it today you would earn a total of 1.00 from holding MDJM or generate 6.25% 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. MDJM
Performance |
| Timeline |
| SLR Investment Corp |
| MDJM |
SLR Investment and MDJM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and MDJM
The main advantage of trading using opposite SLR Investment and MDJM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, MDJM 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 MDJM will offset losses from the drop in MDJM'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 |
| MDJM vs. Nasdaq Inc | MDJM vs. Definitive Healthcare Corp | MDJM vs. SmartStop Self Storage | MDJM vs. Cadence Design 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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