Correlation Between SLR Investment and AMP
Can any of the company-specific risk be diversified away by investing in both SLR Investment and AMP 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 AMP 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 AMP, you can compare the effects of market volatilities on SLR Investment and AMP 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 AMP. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and AMP.
Diversification Opportunities for SLR Investment and AMP
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SLR and AMP is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and AMP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMP 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 AMP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMP has no effect on the direction of SLR Investment i.e., SLR Investment and AMP go up and down completely randomly.
Pair Corralation between SLR Investment and AMP
Assuming the 90 days horizon SLR Investment Corp is expected to generate 0.33 times more return on investment than AMP. However, SLR Investment Corp is 3.07 times less risky than AMP. It trades about -0.13 of its potential returns per unit of risk. AMP is currently generating about -0.43 per unit of risk. If you would invest 1,658 in SLR Investment Corp on December 11, 2024 and sell it today you would lose (51.00) from holding SLR Investment Corp or give up 3.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. AMP
Performance |
| Timeline |
| SLR Investment Corp |
| AMP |
SLR Investment and AMP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and AMP
The main advantage of trading using opposite SLR Investment and AMP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, AMP 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 AMP will offset losses from the drop in AMP's long position.| SLR Investment vs. Siamgas And Petrochemicals | SLR Investment vs. Heidelberg Materials AG | SLR Investment vs. Martin Marietta Materials | SLR Investment vs. Mitsui Chemicals |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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