Correlation Between SLR Investment and BANK MANDIRI
Can any of the company-specific risk be diversified away by investing in both SLR Investment and BANK MANDIRI 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 BANK MANDIRI 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 BANK MANDIRI, you can compare the effects of market volatilities on SLR Investment and BANK MANDIRI 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 BANK MANDIRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and BANK MANDIRI.
Diversification Opportunities for SLR Investment and BANK MANDIRI
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SLR and BANK is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI 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 BANK MANDIRI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK MANDIRI has no effect on the direction of SLR Investment i.e., SLR Investment and BANK MANDIRI go up and down completely randomly.
Pair Corralation between SLR Investment and BANK MANDIRI
Assuming the 90 days horizon SLR Investment Corp is expected to generate 0.52 times more return on investment than BANK MANDIRI. However, SLR Investment Corp is 1.92 times less risky than BANK MANDIRI. It trades about 0.1 of its potential returns per unit of risk. BANK MANDIRI is currently generating about -0.16 per unit of risk. If you would invest 1,530 in SLR Investment Corp on September 12, 2024 and sell it today you would earn a total of 48.00 from holding SLR Investment Corp or generate 3.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. BANK MANDIRI
Performance |
| Timeline |
| SLR Investment Corp |
| BANK MANDIRI |
SLR Investment and BANK MANDIRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and BANK MANDIRI
The main advantage of trading using opposite SLR Investment and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, BANK MANDIRI 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 BANK MANDIRI will offset losses from the drop in BANK MANDIRI's long position.| SLR Investment vs. Ameriprise Financial | SLR Investment vs. Ares Management Corp | SLR Investment vs. Superior Plus Corp | SLR Investment vs. SIVERS SEMICONDUCTORS AB |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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