Correlation Between Greentown Management and SLR Investment

Can any of the company-specific risk be diversified away by investing in both Greentown Management and SLR Investment 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 Greentown Management and SLR Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Greentown Management Holdings and SLR Investment Corp, you can compare the effects of market volatilities on Greentown Management and SLR Investment 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 Greentown Management with a short position of SLR Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greentown Management and SLR Investment.

Diversification Opportunities for Greentown Management and SLR Investment

0.0

Correlation Coefficient

Greentown Management  SLR Investment

Pay attention - limited upside

The 3 months correlation between Greentown and SLR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Greentown Management Holdings and SLR Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLR Investment Corp and Greentown Management 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 Greentown Management Holdings are associated (or correlated) with SLR Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLR Investment Corp has no effect on the direction of Greentown Management i.e., Greentown Management and SLR Investment go up and down completely randomly.

Pair Corralation between Greentown Management and SLR Investment

Assuming the 90 days horizon Greentown Management Holdings is expected to generate 3.95 times more return on investment than SLR Investment. However, Greentown Management is 3.95 times more volatile than SLR Investment Corp. It trades about 0.05 of its potential returns per unit of risk. SLR Investment Corp is currently generating about 0.06 per unit of risk. If you would invest  24.00  in Greentown Management Holdings on October 22, 2024 and sell it today you would earn a total of  26.00  from holding Greentown Management Holdings or generate 108.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Greentown Management Holdings  vs.  SLR Investment Corp

Greentown Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greentown Management Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Greentown Management is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

SLR Investment Corp

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SLR Investment Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, SLR Investment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Greentown Management and SLR Investment

The main advantage of trading using opposite Greentown Management and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greentown Management position performs unexpectedly, SLR Investment 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 SLR Investment will offset losses from the drop in SLR Investment's long position.

The idea behind Greentown Management Holdings and SLR Investment Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.