Correlation Between SLR Investment and Constellation Software
Can any of the company-specific risk be diversified away by investing in both SLR Investment and Constellation Software 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 Constellation Software 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 Constellation Software, you can compare the effects of market volatilities on SLR Investment and Constellation Software 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 Constellation Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Constellation Software.
Diversification Opportunities for SLR Investment and Constellation Software
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SLR and Constellation is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Constellation Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellation Software 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 Constellation Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellation Software has no effect on the direction of SLR Investment i.e., SLR Investment and Constellation Software go up and down completely randomly.
Pair Corralation between SLR Investment and Constellation Software
Assuming the 90 days horizon SLR Investment Corp is expected to generate 1.08 times more return on investment than Constellation Software. However, SLR Investment is 1.08 times more volatile than Constellation Software. It trades about 0.0 of its potential returns per unit of risk. Constellation Software is currently generating about -0.08 per unit of risk. If you would invest 1,620 in SLR Investment Corp on December 8, 2024 and sell it today you would lose (2.00) from holding SLR Investment Corp or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. Constellation Software
Performance |
| Timeline |
| SLR Investment Corp |
| Constellation Software |
SLR Investment and Constellation Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and Constellation Software
The main advantage of trading using opposite SLR Investment and Constellation Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, Constellation Software 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 Constellation Software will offset losses from the drop in Constellation Software's long position.| SLR Investment vs. MIRAMAR HOTEL INV | SLR Investment vs. OFFICE DEPOT | SLR Investment vs. MHP Hotel AG | SLR Investment vs. MAVEN WIRELESS SWEDEN |
| Constellation Software vs. Columbia Sportswear | Constellation Software vs. PLAYMATES TOYS | Constellation Software vs. BOSTON BEER A | Constellation Software vs. Fevertree Drinks PLC |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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