Correlation Between SLR Investment and Fukuoka Financial
Can any of the company-specific risk be diversified away by investing in both SLR Investment and Fukuoka Financial 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 Fukuoka Financial 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 Fukuoka Financial Group, you can compare the effects of market volatilities on SLR Investment and Fukuoka Financial 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 Fukuoka Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Fukuoka Financial.
Diversification Opportunities for SLR Investment and Fukuoka Financial
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SLR and Fukuoka is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Fukuoka Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fukuoka Financial 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 Fukuoka Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fukuoka Financial has no effect on the direction of SLR Investment i.e., SLR Investment and Fukuoka Financial go up and down completely randomly.
Pair Corralation between SLR Investment and Fukuoka Financial
Assuming the 90 days horizon SLR Investment is expected to generate 1.38 times less return on investment than Fukuoka Financial. But when comparing it to its historical volatility, SLR Investment Corp is 1.79 times less risky than Fukuoka Financial. It trades about 0.06 of its potential returns per unit of risk. Fukuoka Financial Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,800 in Fukuoka Financial Group on September 2, 2024 and sell it today you would earn a total of 800.00 from holding Fukuoka Financial Group or generate 44.44% 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. Fukuoka Financial Group
Performance |
| Timeline |
| SLR Investment Corp |
| Fukuoka Financial |
SLR Investment and Fukuoka Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and Fukuoka Financial
The main advantage of trading using opposite SLR Investment and Fukuoka Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, Fukuoka Financial 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 Fukuoka Financial will offset losses from the drop in Fukuoka Financial'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 |
| Fukuoka Financial vs. GREENX METALS LTD | Fukuoka Financial vs. GALENA MINING LTD | Fukuoka Financial vs. PennyMac Mortgage Investment | Fukuoka Financial vs. SLR 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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