Correlation Between SLR Investment and Mid-America Apartment
Can any of the company-specific risk be diversified away by investing in both SLR Investment and Mid-America Apartment 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 Mid-America Apartment 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 Mid America Apartment Communities, you can compare the effects of market volatilities on SLR Investment and Mid-America Apartment 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 Mid-America Apartment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Mid-America Apartment.
Diversification Opportunities for SLR Investment and Mid-America Apartment
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between SLR and Mid-America is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Mid America Apartment Communit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid America Apartment 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 Mid-America Apartment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid America Apartment has no effect on the direction of SLR Investment i.e., SLR Investment and Mid-America Apartment go up and down completely randomly.
Pair Corralation between SLR Investment and Mid-America Apartment
Assuming the 90 days horizon SLR Investment is expected to generate 1.84 times less return on investment than Mid-America Apartment. But when comparing it to its historical volatility, SLR Investment Corp is 1.62 times less risky than Mid-America Apartment. It trades about 0.11 of its potential returns per unit of risk. Mid America Apartment Communities is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 14,222 in Mid America Apartment Communities on November 6, 2024 and sell it today you would earn a total of 443.00 from holding Mid America Apartment Communities or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. Mid America Apartment Communit
Performance |
| Timeline |
| SLR Investment Corp |
| Mid America Apartment |
SLR Investment and Mid-America Apartment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and Mid-America Apartment
The main advantage of trading using opposite SLR Investment and Mid-America Apartment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, Mid-America Apartment 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 Mid-America Apartment will offset losses from the drop in Mid-America Apartment's long position.| SLR Investment vs. Playtech plc | SLR Investment vs. Boyd Gaming | SLR Investment vs. BioNTech SE | SLR Investment vs. PENN NATL GAMING |
| Mid-America Apartment vs. Luckin Coffee | Mid-America Apartment vs. Entravision Communications | Mid-America Apartment vs. T Mobile | Mid-America Apartment vs. Addtech AB |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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