Correlation Between SLR Investment and NISSAN CHEMICAL
Can any of the company-specific risk be diversified away by investing in both SLR Investment and NISSAN CHEMICAL 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 NISSAN CHEMICAL 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 NISSAN CHEMICAL IND, you can compare the effects of market volatilities on SLR Investment and NISSAN CHEMICAL 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 NISSAN CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and NISSAN CHEMICAL.
Diversification Opportunities for SLR Investment and NISSAN CHEMICAL
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SLR and NISSAN is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and NISSAN CHEMICAL IND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISSAN CHEMICAL IND 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 NISSAN CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISSAN CHEMICAL IND has no effect on the direction of SLR Investment i.e., SLR Investment and NISSAN CHEMICAL go up and down completely randomly.
Pair Corralation between SLR Investment and NISSAN CHEMICAL
Assuming the 90 days horizon SLR Investment Corp is expected to generate 1.73 times more return on investment than NISSAN CHEMICAL. However, SLR Investment is 1.73 times more volatile than NISSAN CHEMICAL IND. It trades about 0.26 of its potential returns per unit of risk. NISSAN CHEMICAL IND is currently generating about 0.26 per unit of risk. If you would invest 1,404 in SLR Investment Corp on September 1, 2024 and sell it today you would earn a total of 161.00 from holding SLR Investment Corp or generate 11.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. NISSAN CHEMICAL IND
Performance |
| Timeline |
| SLR Investment Corp |
| NISSAN CHEMICAL IND |
SLR Investment and NISSAN CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and NISSAN CHEMICAL
The main advantage of trading using opposite SLR Investment and NISSAN CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, NISSAN CHEMICAL 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 NISSAN CHEMICAL will offset losses from the drop in NISSAN CHEMICAL's long position.| SLR Investment vs. Ameriprise Financial | SLR Investment vs. Ares Management Corp | SLR Investment vs. Superior Plus Corp | SLR Investment vs. NMI Holdings |
| NISSAN CHEMICAL vs. TFS FINANCIAL | NISSAN CHEMICAL vs. Commonwealth Bank of | NISSAN CHEMICAL vs. Regions Financial | NISSAN CHEMICAL vs. National Bank Holdings |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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