Correlation Between SLR Investment and FARM 51
Can any of the company-specific risk be diversified away by investing in both SLR Investment and FARM 51 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 FARM 51 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 FARM 51 GROUP, you can compare the effects of market volatilities on SLR Investment and FARM 51 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 FARM 51. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and FARM 51.
Diversification Opportunities for SLR Investment and FARM 51
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SLR and FARM is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and FARM 51 GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FARM 51 GROUP 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 FARM 51. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FARM 51 GROUP has no effect on the direction of SLR Investment i.e., SLR Investment and FARM 51 go up and down completely randomly.
Pair Corralation between SLR Investment and FARM 51
Assuming the 90 days horizon SLR Investment is expected to generate 1.17 times less return on investment than FARM 51. But when comparing it to its historical volatility, SLR Investment Corp is 2.34 times less risky than FARM 51. It trades about 0.1 of its potential returns per unit of risk. FARM 51 GROUP is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 291.00 in FARM 51 GROUP on October 28, 2024 and sell it today you would earn a total of 11.00 from holding FARM 51 GROUP or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. FARM 51 GROUP
Performance |
| Timeline |
| SLR Investment Corp |
| FARM 51 GROUP |
SLR Investment and FARM 51 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and FARM 51
The main advantage of trading using opposite SLR Investment and FARM 51 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, FARM 51 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 FARM 51 will offset losses from the drop in FARM 51's long position.| SLR Investment vs. KOBE STEEL LTD | SLR Investment vs. Mount Gibson Iron | SLR Investment vs. RELIANCE STEEL AL | SLR Investment vs. CREO MEDICAL GRP |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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