Correlation Between SLR Investment and Aluminum
Can any of the company-specific risk be diversified away by investing in both SLR Investment and Aluminum 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 Aluminum 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 Aluminum of, you can compare the effects of market volatilities on SLR Investment and Aluminum 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 Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Aluminum.
Diversification Opportunities for SLR Investment and Aluminum
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between SLR and Aluminum is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Aluminum of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminum 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 Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminum has no effect on the direction of SLR Investment i.e., SLR Investment and Aluminum go up and down completely randomly.
Pair Corralation between SLR Investment and Aluminum
Assuming the 90 days horizon SLR Investment is expected to generate 5.61 times less return on investment than Aluminum. But when comparing it to its historical volatility, SLR Investment Corp is 4.18 times less risky than Aluminum. It trades about 0.15 of its potential returns per unit of risk. Aluminum of is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 56.00 in Aluminum of on October 29, 2024 and sell it today you would earn a total of 7.00 from holding Aluminum of or generate 12.5% 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. Aluminum of
Performance |
| Timeline |
| SLR Investment Corp |
| Aluminum |
SLR Investment and Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and Aluminum
The main advantage of trading using opposite SLR Investment and Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, Aluminum 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 Aluminum will offset losses from the drop in Aluminum's long position.| SLR Investment vs. LOANDEPOT INC A | SLR Investment vs. ALBIS LEASING AG | SLR Investment vs. Cardinal Health | SLR Investment vs. RCI Hospitality Holdings |
| Aluminum vs. REINET INVESTMENTS SCA | Aluminum vs. Luckin Coffee | Aluminum vs. New Residential Investment | Aluminum vs. Norwegian Air Shuttle |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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