Correlation Between Virgin Group and SLR Investment

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

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

Diversification Opportunities for Virgin Group and SLR Investment

0.5

Correlation Coefficient

Virgin Group  SLR Investment

Very weak diversification

The 3 months correlation between Virgin and SLR is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Virgin Group Acquisition 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 Virgin Group 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 Virgin Group Acquisition 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 Virgin Group i.e., Virgin Group and SLR Investment go up and down completely randomly.

Pair Corralation between Virgin Group and SLR Investment

Given the investment horizon of 90 days Virgin Group is expected to generate 2.9 times less return on investment than SLR Investment. In addition to that, Virgin Group is 5.46 times more volatile than SLR Investment Corp. It trades about 0.01 of its total potential returns per unit of risk. SLR Investment Corp is currently generating about 0.21 per unit of volatility. If you would invest  1,510  in SLR Investment Corp on October 24, 2024 and sell it today you would earn a total of  165.00  from holding SLR Investment Corp or generate 10.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Virgin Group Acquisition  vs.  SLR Investment Corp

Virgin Group Acquisition

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Virgin Group Acquisition are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Virgin Group is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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 Virgin Group and SLR Investment

The main advantage of trading using opposite Virgin Group and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virgin Group 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 Virgin Group Acquisition 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.