Correlation Between SLR Investment and Toho
Can any of the company-specific risk be diversified away by investing in both SLR Investment and Toho 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 Toho 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 Toho Co, you can compare the effects of market volatilities on SLR Investment and Toho 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 Toho. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Toho.
Diversification Opportunities for SLR Investment and Toho
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SLR and Toho is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Toho Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toho 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 Toho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toho has no effect on the direction of SLR Investment i.e., SLR Investment and Toho go up and down completely randomly.
Pair Corralation between SLR Investment and Toho
Assuming the 90 days horizon SLR Investment Corp is expected to generate 0.78 times more return on investment than Toho. However, SLR Investment Corp is 1.28 times less risky than Toho. It trades about 0.1 of its potential returns per unit of risk. Toho Co is currently generating about -0.34 per unit of risk. If you would invest 1,559 in SLR Investment Corp on October 15, 2024 and sell it today you would earn a total of 32.00 from holding SLR Investment Corp or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.12% |
| Values | Daily Returns |
SLR Investment Corp vs. Toho Co
Performance |
| Timeline |
| SLR Investment Corp |
| Toho |
SLR Investment and Toho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and Toho
The main advantage of trading using opposite SLR Investment and Toho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, Toho 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 Toho will offset losses from the drop in Toho's long position.| SLR Investment vs. IMPERIAL TOBACCO | SLR Investment vs. AAC TECHNOLOGHLDGADR | SLR Investment vs. PKSHA TECHNOLOGY INC | SLR Investment vs. Summit Hotel Properties |
| Toho vs. Live Nation Entertainment | Toho vs. CTS Eventim AG | Toho vs. Cinemark Holdings | Toho vs. Superior Plus Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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