Correlation Between SLR Investment and UmweltBank
Can any of the company-specific risk be diversified away by investing in both SLR Investment and UmweltBank 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 UmweltBank 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 UmweltBank AG, you can compare the effects of market volatilities on SLR Investment and UmweltBank 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 UmweltBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and UmweltBank.
Diversification Opportunities for SLR Investment and UmweltBank
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SLR and UmweltBank is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and UmweltBank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UmweltBank AG 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 UmweltBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UmweltBank AG has no effect on the direction of SLR Investment i.e., SLR Investment and UmweltBank go up and down completely randomly.
Pair Corralation between SLR Investment and UmweltBank
Assuming the 90 days horizon SLR Investment Corp is expected to generate 0.64 times more return on investment than UmweltBank. However, SLR Investment Corp is 1.55 times less risky than UmweltBank. It trades about 0.1 of its potential returns per unit of risk. UmweltBank AG is currently generating about -0.19 per unit of risk. If you would invest 1,586 in SLR Investment Corp on November 7, 2024 and sell it today you would earn a total of 27.00 from holding SLR Investment Corp or generate 1.7% 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. UmweltBank AG
Performance |
| Timeline |
| SLR Investment Corp |
| UmweltBank AG |
SLR Investment and UmweltBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and UmweltBank
The main advantage of trading using opposite SLR Investment and UmweltBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, UmweltBank 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 UmweltBank will offset losses from the drop in UmweltBank's long position.| SLR Investment vs. Playtech plc | SLR Investment vs. Boyd Gaming | SLR Investment vs. BioNTech SE | SLR Investment vs. PENN NATL GAMING |
| UmweltBank vs. SIVERS SEMICONDUCTORS AB | UmweltBank vs. NorAm Drilling AS | UmweltBank vs. Volkswagen AG | UmweltBank vs. Darden Restaurants |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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