Correlation Between SLR Investment and Ambac Financial
Can any of the company-specific risk be diversified away by investing in both SLR Investment and Ambac Financial 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 Ambac Financial 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 Ambac Financial Group, you can compare the effects of market volatilities on SLR Investment and Ambac Financial 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 Ambac Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Ambac Financial.
Diversification Opportunities for SLR Investment and Ambac Financial
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SLR and Ambac is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Ambac Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambac Financial 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 Ambac Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambac Financial Group has no effect on the direction of SLR Investment i.e., SLR Investment and Ambac Financial go up and down completely randomly.
Pair Corralation between SLR Investment and Ambac Financial
Assuming the 90 days horizon SLR Investment Corp is expected to under-perform the Ambac Financial. But the stock apears to be less risky and, when comparing its historical volatility, SLR Investment Corp is 1.89 times less risky than Ambac Financial. The stock trades about -0.02 of its potential returns per unit of risk. The Ambac Financial Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,140 in Ambac Financial Group on September 22, 2024 and sell it today you would earn a total of 20.00 from holding Ambac Financial Group or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. Ambac Financial Group
Performance |
| Timeline |
| SLR Investment Corp |
| Ambac Financial Group |
SLR Investment and Ambac Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and Ambac Financial
The main advantage of trading using opposite SLR Investment and Ambac Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, Ambac Financial 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 Ambac Financial will offset losses from the drop in Ambac Financial's long position.| SLR Investment vs. STORE ELECTRONIC | SLR Investment vs. Nordic Semiconductor ASA | SLR Investment vs. AOI Electronics Co | SLR Investment vs. Elmos Semiconductor SE |
| Ambac Financial vs. WisdomTree Investments | Ambac Financial vs. SLR Investment Corp | Ambac Financial vs. EAT WELL INVESTMENT | Ambac Financial vs. New Residential Investment |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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