Correlation Between SLR Investment and China Mobile
Can any of the company-specific risk be diversified away by investing in both SLR Investment and China Mobile 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 China Mobile 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 China Life Insurance, you can compare the effects of market volatilities on SLR Investment and China Mobile 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 China Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and China Mobile.
Diversification Opportunities for SLR Investment and China Mobile
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SLR and China is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and China Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Life 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 China Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Life Insurance has no effect on the direction of SLR Investment i.e., SLR Investment and China Mobile go up and down completely randomly.
Pair Corralation between SLR Investment and China Mobile
Assuming the 90 days horizon SLR Investment is expected to generate 3.61 times less return on investment than China Mobile. But when comparing it to its historical volatility, SLR Investment Corp is 3.45 times less risky than China Mobile. It trades about 0.07 of its potential returns per unit of risk. China Life Insurance is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 56.00 in China Life Insurance on September 14, 2024 and sell it today you would earn a total of 129.00 from holding China Life Insurance or generate 230.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. China Life Insurance
Performance |
| Timeline |
| SLR Investment Corp |
| China Life Insurance |
SLR Investment and China Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and China Mobile
The main advantage of trading using opposite SLR Investment and China Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, China Mobile 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 China Mobile will offset losses from the drop in China Mobile's long position.| SLR Investment vs. QBE Insurance Group | SLR Investment vs. Selective Insurance Group | SLR Investment vs. Summit Materials | SLR Investment vs. REVO INSURANCE SPA |
| China Mobile vs. SLR Investment Corp | China Mobile vs. JJ SNACK FOODS | China Mobile vs. THAI BEVERAGE | China Mobile vs. AOYAMA TRADING |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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