Correlation Between SLR Investment and SCOTT TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both SLR Investment and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY, you can compare the effects of market volatilities on SLR Investment and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and SCOTT TECHNOLOGY.
Diversification Opportunities for SLR Investment and SCOTT TECHNOLOGY
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SLR and SCOTT is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and SCOTT TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOTT TECHNOLOGY has no effect on the direction of SLR Investment i.e., SLR Investment and SCOTT TECHNOLOGY go up and down completely randomly.
Pair Corralation between SLR Investment and SCOTT TECHNOLOGY
Assuming the 90 days horizon SLR Investment is expected to generate 3.33 times less return on investment than SCOTT TECHNOLOGY. But when comparing it to its historical volatility, SLR Investment Corp is 2.49 times less risky than SCOTT TECHNOLOGY. It trades about 0.04 of its potential returns per unit of risk. SCOTT TECHNOLOGY is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 117.00 in SCOTT TECHNOLOGY on November 5, 2024 and sell it today you would earn a total of 2.00 from holding SCOTT TECHNOLOGY or generate 1.71% 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. SCOTT TECHNOLOGY
Performance |
| Timeline |
| SLR Investment Corp |
| SCOTT TECHNOLOGY |
SLR Investment and SCOTT TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and SCOTT TECHNOLOGY
The main advantage of trading using opposite SLR Investment and SCOTT TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY will offset losses from the drop in SCOTT TECHNOLOGY's long position.| SLR Investment vs. AUST AGRICULTURAL | SLR Investment vs. New Residential Investment | SLR Investment vs. Australian Agricultural | SLR Investment vs. TITAN MACHINERY |
| SCOTT TECHNOLOGY vs. MCEWEN MINING INC | SCOTT TECHNOLOGY vs. Aristocrat Leisure Limited | SCOTT TECHNOLOGY vs. ANTA SPORTS PRODUCT | SCOTT TECHNOLOGY vs. Globex Mining Enterprises |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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