Correlation Between SLR Investment and AUST AGRICULTURAL
Can any of the company-specific risk be diversified away by investing in both SLR Investment and AUST AGRICULTURAL 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 AUST AGRICULTURAL 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 AUST AGRICULTURAL, you can compare the effects of market volatilities on SLR Investment and AUST AGRICULTURAL 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 AUST AGRICULTURAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and AUST AGRICULTURAL.
Diversification Opportunities for SLR Investment and AUST AGRICULTURAL
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SLR and AUST is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and AUST AGRICULTURAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUST AGRICULTURAL 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 AUST AGRICULTURAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUST AGRICULTURAL has no effect on the direction of SLR Investment i.e., SLR Investment and AUST AGRICULTURAL go up and down completely randomly.
Pair Corralation between SLR Investment and AUST AGRICULTURAL
Assuming the 90 days horizon SLR Investment Corp is expected to generate 1.48 times more return on investment than AUST AGRICULTURAL. However, SLR Investment is 1.48 times more volatile than AUST AGRICULTURAL. It trades about 0.19 of its potential returns per unit of risk. AUST AGRICULTURAL is currently generating about -0.05 per unit of risk. If you would invest 1,501 in SLR Investment Corp on September 13, 2024 and sell it today you would earn a total of 85.00 from holding SLR Investment Corp or generate 5.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. AUST AGRICULTURAL
Performance |
| Timeline |
| SLR Investment Corp |
| AUST AGRICULTURAL |
SLR Investment and AUST AGRICULTURAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and AUST AGRICULTURAL
The main advantage of trading using opposite SLR Investment and AUST AGRICULTURAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, AUST AGRICULTURAL 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 AUST AGRICULTURAL will offset losses from the drop in AUST AGRICULTURAL's long position.| SLR Investment vs. EVS Broadcast Equipment | SLR Investment vs. Summit Hotel Properties | SLR Investment vs. Park Hotels Resorts | SLR Investment vs. BROADSTNET LEADL 00025 |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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