Correlation Between SLR Investment and Magna International
Can any of the company-specific risk be diversified away by investing in both SLR Investment and Magna International 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 Magna International 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 Magna International, you can compare the effects of market volatilities on SLR Investment and Magna International 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 Magna International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Magna International.
Diversification Opportunities for SLR Investment and Magna International
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between SLR and Magna is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Magna International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna International 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 Magna International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna International has no effect on the direction of SLR Investment i.e., SLR Investment and Magna International go up and down completely randomly.
Pair Corralation between SLR Investment and Magna International
Assuming the 90 days horizon SLR Investment Corp is expected to generate 0.63 times more return on investment than Magna International. However, SLR Investment Corp is 1.58 times less risky than Magna International. It trades about 0.07 of its potential returns per unit of risk. Magna International is currently generating about -0.01 per unit of risk. If you would invest 1,122 in SLR Investment Corp on November 5, 2024 and sell it today you would earn a total of 491.00 from holding SLR Investment Corp or generate 43.76% 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. Magna International
Performance |
| Timeline |
| SLR Investment Corp |
| Magna International |
SLR Investment and Magna International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and Magna International
The main advantage of trading using opposite SLR Investment and Magna International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, Magna International 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 Magna International will offset losses from the drop in Magna International's long position.| SLR Investment vs. Sumitomo Rubber Industries | SLR Investment vs. THRACE PLASTICS | SLR Investment vs. Summit Materials | SLR Investment vs. OURGAME INTHOLDL 00005 |
| Magna International vs. Dno ASA | Magna International vs. DENSO P ADR | Magna International vs. Aptiv PLC | Magna International vs. Bridgestone |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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