Correlation Between SLR Investment and Gelsenwasser
Can any of the company-specific risk be diversified away by investing in both SLR Investment and Gelsenwasser 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 Gelsenwasser 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 Gelsenwasser AG, you can compare the effects of market volatilities on SLR Investment and Gelsenwasser 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 Gelsenwasser. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Gelsenwasser.
Diversification Opportunities for SLR Investment and Gelsenwasser
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SLR and Gelsenwasser is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Gelsenwasser AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gelsenwasser 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 Gelsenwasser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gelsenwasser AG has no effect on the direction of SLR Investment i.e., SLR Investment and Gelsenwasser go up and down completely randomly.
Pair Corralation between SLR Investment and Gelsenwasser
Assuming the 90 days horizon SLR Investment Corp is expected to generate 0.67 times more return on investment than Gelsenwasser. However, SLR Investment Corp is 1.5 times less risky than Gelsenwasser. It trades about 0.21 of its potential returns per unit of risk. Gelsenwasser AG is currently generating about 0.01 per unit of risk. If you would invest 1,414 in SLR Investment Corp on August 25, 2024 and sell it today you would earn a total of 131.00 from holding SLR Investment Corp or generate 9.26% 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. Gelsenwasser AG
Performance |
| Timeline |
| SLR Investment Corp |
| Gelsenwasser AG |
SLR Investment and Gelsenwasser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and Gelsenwasser
The main advantage of trading using opposite SLR Investment and Gelsenwasser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, Gelsenwasser 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 Gelsenwasser will offset losses from the drop in Gelsenwasser's long position.| SLR Investment vs. The Bank of | SLR Investment vs. Ares Management Corp | SLR Investment vs. Superior Plus Corp | SLR Investment vs. NMI Holdings |
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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 Correlations module to find global opportunities by holding instruments from different markets.
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