Correlation Between SLR Investment and CHINA VANKE
Can any of the company-specific risk be diversified away by investing in both SLR Investment and CHINA VANKE 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 CHINA VANKE 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 CHINA VANKE TD, you can compare the effects of market volatilities on SLR Investment and CHINA VANKE 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 CHINA VANKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and CHINA VANKE.
Diversification Opportunities for SLR Investment and CHINA VANKE
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between SLR and CHINA is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and CHINA VANKE TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA VANKE TD 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 CHINA VANKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA VANKE TD has no effect on the direction of SLR Investment i.e., SLR Investment and CHINA VANKE go up and down completely randomly.
Pair Corralation between SLR Investment and CHINA VANKE
Assuming the 90 days horizon SLR Investment is expected to generate 6.89 times less return on investment than CHINA VANKE. But when comparing it to its historical volatility, SLR Investment Corp is 7.71 times less risky than CHINA VANKE. It trades about 0.14 of its potential returns per unit of risk. CHINA VANKE TD is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 45.00 in CHINA VANKE TD on September 2, 2024 and sell it today you would earn a total of 32.00 from holding CHINA VANKE TD or generate 71.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. CHINA VANKE TD
Performance |
| Timeline |
| SLR Investment Corp |
| CHINA VANKE TD |
SLR Investment and CHINA VANKE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and CHINA VANKE
The main advantage of trading using opposite SLR Investment and CHINA VANKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, CHINA VANKE 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 CHINA VANKE will offset losses from the drop in CHINA VANKE's long position.| SLR Investment vs. Ameriprise Financial | SLR Investment vs. Ares Management Corp | SLR Investment vs. Superior Plus Corp | SLR Investment vs. NMI Holdings |
| CHINA VANKE vs. TRADEGATE | CHINA VANKE vs. Carsales | CHINA VANKE vs. DiamondRock Hospitality | CHINA VANKE vs. CARSALESCOM |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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