Correlation Between L Catterton and Slam Corp

Can any of the company-specific risk be diversified away by investing in both L Catterton and Slam Corp 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 L Catterton and Slam Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between L Catterton Asia and Slam Corp, you can compare the effects of market volatilities on L Catterton and Slam Corp 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 L Catterton with a short position of Slam Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Catterton and Slam Corp.

Diversification Opportunities for L Catterton and Slam Corp

0.0

Correlation Coefficient

L Catterton  Slam Corp

Pay attention - limited upside

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

Pair Corralation between L Catterton and Slam Corp

If you would invest  12.00  in Slam Corp on September 16, 2024 and sell it today you would earn a total of  0.00  from holding Slam Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

L Catterton Asia  vs.  Slam Corp

L Catterton Asia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days L Catterton Asia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, L Catterton is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Slam Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Slam Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable primary indicators, Slam Corp is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with L Catterton and Slam Corp

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

The idea behind L Catterton Asia and Slam 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.