Correlation Between SLR Investment and NH HOTEL
Can any of the company-specific risk be diversified away by investing in both SLR Investment and NH HOTEL 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 NH HOTEL 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 NH HOTEL GROUP, you can compare the effects of market volatilities on SLR Investment and NH HOTEL 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 NH HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and NH HOTEL.
Diversification Opportunities for SLR Investment and NH HOTEL
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SLR and NH5 is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and NH HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH HOTEL GROUP 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 NH HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH HOTEL GROUP has no effect on the direction of SLR Investment i.e., SLR Investment and NH HOTEL go up and down completely randomly.
Pair Corralation between SLR Investment and NH HOTEL
Assuming the 90 days horizon SLR Investment Corp is expected to generate 0.78 times more return on investment than NH HOTEL. However, SLR Investment Corp is 1.28 times less risky than NH HOTEL. It trades about 0.2 of its potential returns per unit of risk. NH HOTEL GROUP is currently generating about 0.06 per unit of risk. If you would invest 1,417 in SLR Investment Corp on August 28, 2024 and sell it today you would earn a total of 131.00 from holding SLR Investment Corp or generate 9.24% 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. NH HOTEL GROUP
Performance |
| Timeline |
| SLR Investment Corp |
| NH HOTEL GROUP |
SLR Investment and NH HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and NH HOTEL
The main advantage of trading using opposite SLR Investment and NH HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, NH HOTEL 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 NH HOTEL will offset losses from the drop in NH HOTEL's long position.| SLR Investment vs. Superior Plus Corp | SLR Investment vs. NMI Holdings | SLR Investment vs. Origin Agritech | SLR Investment vs. SIVERS SEMICONDUCTORS 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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