Correlation Between SLR Investment and Insteel Industries
Can any of the company-specific risk be diversified away by investing in both SLR Investment and Insteel Industries 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 Insteel Industries 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 Insteel Industries, you can compare the effects of market volatilities on SLR Investment and Insteel Industries 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 Insteel Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Insteel Industries.
Diversification Opportunities for SLR Investment and Insteel Industries
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SLR and Insteel is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Insteel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insteel Industries 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 Insteel Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insteel Industries has no effect on the direction of SLR Investment i.e., SLR Investment and Insteel Industries go up and down completely randomly.
Pair Corralation between SLR Investment and Insteel Industries
Assuming the 90 days horizon SLR Investment Corp is expected to generate 0.47 times more return on investment than Insteel Industries. However, SLR Investment Corp is 2.14 times less risky than Insteel Industries. It trades about 0.08 of its potential returns per unit of risk. Insteel Industries is currently generating about 0.0 per unit of risk. If you would invest 1,267 in SLR Investment Corp on September 3, 2024 and sell it today you would earn a total of 294.00 from holding SLR Investment Corp or generate 23.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. Insteel Industries
Performance |
| Timeline |
| SLR Investment Corp |
| Insteel Industries |
SLR Investment and Insteel Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and Insteel Industries
The main advantage of trading using opposite SLR Investment and Insteel Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, Insteel Industries 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 Insteel Industries will offset losses from the drop in Insteel Industries' long position.| SLR Investment vs. Blackstone Group | SLR Investment vs. BlackRock | SLR Investment vs. The Bank of | SLR Investment vs. Ameriprise Financial |
| Insteel Industries vs. thyssenkrupp AG | Insteel Industries vs. Superior Plus Corp | Insteel Industries vs. NMI Holdings | Insteel Industries vs. Origin Agritech |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |