Correlation Between SLR Investment and HEALTHSTREAM
Can any of the company-specific risk be diversified away by investing in both SLR Investment and HEALTHSTREAM 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 HEALTHSTREAM 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 HEALTHSTREAM, you can compare the effects of market volatilities on SLR Investment and HEALTHSTREAM 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 HEALTHSTREAM. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and HEALTHSTREAM.
Diversification Opportunities for SLR Investment and HEALTHSTREAM
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SLR and HEALTHSTREAM is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and HEALTHSTREAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEALTHSTREAM 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 HEALTHSTREAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEALTHSTREAM has no effect on the direction of SLR Investment i.e., SLR Investment and HEALTHSTREAM go up and down completely randomly.
Pair Corralation between SLR Investment and HEALTHSTREAM
Assuming the 90 days horizon SLR Investment Corp is expected to generate 0.8 times more return on investment than HEALTHSTREAM. However, SLR Investment Corp is 1.25 times less risky than HEALTHSTREAM. It trades about 0.09 of its potential returns per unit of risk. HEALTHSTREAM is currently generating about -0.03 per unit of risk. If you would invest 1,521 in SLR Investment Corp on October 30, 2024 and sell it today you would earn a total of 51.00 from holding SLR Investment Corp or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. HEALTHSTREAM
Performance |
| Timeline |
| SLR Investment Corp |
| HEALTHSTREAM |
SLR Investment and HEALTHSTREAM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and HEALTHSTREAM
The main advantage of trading using opposite SLR Investment and HEALTHSTREAM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, HEALTHSTREAM 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 HEALTHSTREAM will offset losses from the drop in HEALTHSTREAM's long position.| SLR Investment vs. TAL Education Group | SLR Investment vs. STRAYER EDUCATION | SLR Investment vs. Perdoceo Education | SLR Investment vs. SCOTT TECHNOLOGY |
| HEALTHSTREAM vs. Apple Inc | HEALTHSTREAM vs. Apple Inc | HEALTHSTREAM vs. Apple Inc | HEALTHSTREAM vs. Apple Inc |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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