Correlation Between SLR Investment and Ultra Clean
Can any of the company-specific risk be diversified away by investing in both SLR Investment and Ultra Clean 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 Ultra Clean 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 Ultra Clean Holdings, you can compare the effects of market volatilities on SLR Investment and Ultra Clean 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 Ultra Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Ultra Clean.
Diversification Opportunities for SLR Investment and Ultra Clean
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SLR and Ultra is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Ultra Clean Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra Clean Holdings 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 Ultra Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultra Clean Holdings has no effect on the direction of SLR Investment i.e., SLR Investment and Ultra Clean go up and down completely randomly.
Pair Corralation between SLR Investment and Ultra Clean
Assuming the 90 days horizon SLR Investment Corp is expected to generate 0.33 times more return on investment than Ultra Clean. However, SLR Investment Corp is 3.05 times less risky than Ultra Clean. It trades about 0.08 of its potential returns per unit of risk. Ultra Clean Holdings is currently generating about 0.0 per unit of risk. If you would invest 1,096 in SLR Investment Corp on December 12, 2024 and sell it today you would earn a total of 511.00 from holding SLR Investment Corp or generate 46.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SLR Investment Corp vs. Ultra Clean Holdings
Performance |
Timeline |
SLR Investment Corp |
Ultra Clean Holdings |
SLR Investment and Ultra Clean Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SLR Investment and Ultra Clean
The main advantage of trading using opposite SLR Investment and Ultra Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, Ultra Clean 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 Ultra Clean will offset losses from the drop in Ultra Clean's long position.SLR Investment vs. International Consolidated Airlines | ||
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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