Correlation Between SLR Investment and X-FAB Silicon
Can any of the company-specific risk be diversified away by investing in both SLR Investment and X-FAB Silicon 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 X-FAB Silicon 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 X FAB Silicon Foundries, you can compare the effects of market volatilities on SLR Investment and X-FAB Silicon 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 X-FAB Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and X-FAB Silicon.
Diversification Opportunities for SLR Investment and X-FAB Silicon
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between SLR and X-FAB is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X-FAB Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of SLR Investment i.e., SLR Investment and X-FAB Silicon go up and down completely randomly.
Pair Corralation between SLR Investment and X-FAB Silicon
Assuming the 90 days horizon SLR Investment Corp is expected to generate 0.49 times more return on investment than X-FAB Silicon. However, SLR Investment Corp is 2.05 times less risky than X-FAB Silicon. It trades about 0.1 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about 0.03 per unit of risk. If you would invest 1,559 in SLR Investment Corp on October 16, 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. X FAB Silicon Foundries
Performance |
| Timeline |
| SLR Investment Corp |
| X FAB Silicon |
SLR Investment and X-FAB Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and X-FAB Silicon
The main advantage of trading using opposite SLR Investment and X-FAB Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, X-FAB Silicon 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 X-FAB Silicon will offset losses from the drop in X-FAB Silicon'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 |
| X-FAB Silicon vs. NTG Nordic Transport | X-FAB Silicon vs. SPORT LISBOA E | X-FAB Silicon vs. SLR Investment Corp | X-FAB Silicon vs. Algonquin Power Utilities |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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