Correlation Between SLR Investment and Mid America
Can any of the company-specific risk be diversified away by investing in both SLR Investment and Mid America 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 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 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Mid America.
Diversification Opportunities for SLR Investment and Mid America
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SLR and Mid is 0.4. 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. 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 go up and down completely randomly.
Pair Corralation between SLR Investment and Mid America
Assuming the 90 days horizon SLR Investment Corp is expected to generate 0.63 times more return on investment than Mid America. However, SLR Investment Corp is 1.58 times less risky than Mid America. It trades about 0.09 of its potential returns per unit of risk. Mid America Apartment Communities is currently generating about -0.12 per unit of risk. If you would invest 1,571 in SLR Investment Corp on October 28, 2024 and sell it today you would earn a total of 21.00 from holding SLR Investment Corp or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| 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 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and Mid America
The main advantage of trading using opposite SLR Investment and Mid America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, Mid America 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 will offset losses from the drop in Mid America'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 |
| Mid America vs. Easy Software AG | Mid America vs. Lamar Advertising | Mid America vs. CARSALESCOM | Mid America vs. CyberArk Software |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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