Correlation Between SLR Investment and LIFENET INSURANCE
Can any of the company-specific risk be diversified away by investing in both SLR Investment and LIFENET INSURANCE 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 LIFENET INSURANCE 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 LIFENET INSURANCE CO, you can compare the effects of market volatilities on SLR Investment and LIFENET INSURANCE 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 LIFENET INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and LIFENET INSURANCE.
Diversification Opportunities for SLR Investment and LIFENET INSURANCE
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SLR and LIFENET is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and LIFENET INSURANCE CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFENET INSURANCE 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 LIFENET INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFENET INSURANCE has no effect on the direction of SLR Investment i.e., SLR Investment and LIFENET INSURANCE go up and down completely randomly.
Pair Corralation between SLR Investment and LIFENET INSURANCE
Assuming the 90 days horizon SLR Investment is expected to generate 2.68 times less return on investment than LIFENET INSURANCE. But when comparing it to its historical volatility, SLR Investment Corp is 2.43 times less risky than LIFENET INSURANCE. It trades about 0.08 of its potential returns per unit of risk. LIFENET INSURANCE CO is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 615.00 in LIFENET INSURANCE CO on September 12, 2024 and sell it today you would earn a total of 555.00 from holding LIFENET INSURANCE CO or generate 90.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. LIFENET INSURANCE CO
Performance |
| Timeline |
| SLR Investment Corp |
| LIFENET INSURANCE |
SLR Investment and LIFENET INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and LIFENET INSURANCE
The main advantage of trading using opposite SLR Investment and LIFENET INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, LIFENET INSURANCE 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 LIFENET INSURANCE will offset losses from the drop in LIFENET INSURANCE's long position.| SLR Investment vs. Ameriprise Financial | SLR Investment vs. Ares Management Corp | SLR Investment vs. Superior Plus Corp | SLR Investment vs. SIVERS SEMICONDUCTORS AB |
| LIFENET INSURANCE vs. Xtrackers LevDAX | LIFENET INSURANCE vs. Lyxor 1 | LIFENET INSURANCE vs. Xtrackers ShortDAX |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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