Correlation Between SLR Investment and AECOM TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both SLR Investment and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY 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 AECOM TECHNOLOGY, you can compare the effects of market volatilities on SLR Investment and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and AECOM TECHNOLOGY.
Diversification Opportunities for SLR Investment and AECOM TECHNOLOGY
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SLR and AECOM is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and AECOM TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECOM TECHNOLOGY 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 AECOM TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECOM TECHNOLOGY has no effect on the direction of SLR Investment i.e., SLR Investment and AECOM TECHNOLOGY go up and down completely randomly.
Pair Corralation between SLR Investment and AECOM TECHNOLOGY
Assuming the 90 days horizon SLR Investment Corp is expected to generate 0.86 times more return on investment than AECOM TECHNOLOGY. However, SLR Investment Corp is 1.16 times less risky than AECOM TECHNOLOGY. It trades about 0.07 of its potential returns per unit of risk. AECOM TECHNOLOGY is currently generating about 0.05 per unit of risk. If you would invest 1,114 in SLR Investment Corp on October 16, 2024 and sell it today you would earn a total of 477.00 from holding SLR Investment Corp or generate 42.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. AECOM TECHNOLOGY
Performance |
| Timeline |
| SLR Investment Corp |
| AECOM TECHNOLOGY |
SLR Investment and AECOM TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and AECOM TECHNOLOGY
The main advantage of trading using opposite SLR Investment and AECOM TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, AECOM TECHNOLOGY 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 AECOM TECHNOLOGY will offset losses from the drop in AECOM TECHNOLOGY's long position.| SLR Investment vs. SOEDER SPORTFISKE AB | SLR Investment vs. LINMON MEDIA LTD | SLR Investment vs. PARKEN Sport Entertainment | SLR Investment vs. Nexstar Media Group |
| AECOM TECHNOLOGY vs. Federal Agricultural Mortgage | AECOM TECHNOLOGY vs. WIMFARM SA EO | AECOM TECHNOLOGY vs. SLR Investment Corp | AECOM TECHNOLOGY vs. Guangdong Investment Limited |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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