Correlation Between SLR Investment and Tokyu Construction
Can any of the company-specific risk be diversified away by investing in both SLR Investment and Tokyu Construction 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 Tokyu Construction 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 Tokyu Construction Co, you can compare the effects of market volatilities on SLR Investment and Tokyu Construction 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 Tokyu Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Tokyu Construction.
Diversification Opportunities for SLR Investment and Tokyu Construction
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SLR and Tokyu is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Tokyu Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyu Construction 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 Tokyu Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyu Construction has no effect on the direction of SLR Investment i.e., SLR Investment and Tokyu Construction go up and down completely randomly.
Pair Corralation between SLR Investment and Tokyu Construction
Assuming the 90 days horizon SLR Investment Corp is expected to generate 0.87 times more return on investment than Tokyu Construction. However, SLR Investment Corp is 1.15 times less risky than Tokyu Construction. It trades about 0.06 of its potential returns per unit of risk. Tokyu Construction Co is currently generating about 0.0 per unit of risk. If you would invest 1,170 in SLR Investment Corp on October 28, 2024 and sell it today you would earn a total of 422.00 from holding SLR Investment Corp or generate 36.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
SLR Investment Corp vs. Tokyu Construction Co
Performance |
Timeline |
SLR Investment Corp |
Tokyu Construction |
SLR Investment and Tokyu Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SLR Investment and Tokyu Construction
The main advantage of trading using opposite SLR Investment and Tokyu Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, Tokyu Construction 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 Tokyu Construction will offset losses from the drop in Tokyu Construction's long position.SLR Investment vs. KOBE STEEL LTD | SLR Investment vs. Mount Gibson Iron | SLR Investment vs. RELIANCE STEEL AL | SLR Investment vs. CREO MEDICAL GRP |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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