Correlation Between MICRONIC MYDATA and SLR Investment

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

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

Diversification Opportunities for MICRONIC MYDATA and SLR Investment

0.25

Correlation Coefficient

MICRONIC MYDATA  SLR Investment

Modest diversification

The 3 months correlation between MICRONIC and SLR is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding MICRONIC MYDATA 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 MICRONIC MYDATA 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 MICRONIC MYDATA 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 MICRONIC MYDATA i.e., MICRONIC MYDATA and SLR Investment go up and down completely randomly.

Pair Corralation between MICRONIC MYDATA and SLR Investment

Assuming the 90 days trading horizon MICRONIC MYDATA is expected to under-perform the SLR Investment. In addition to that, MICRONIC MYDATA is 1.13 times more volatile than SLR Investment Corp. It trades about -0.04 of its total potential returns per unit of risk. SLR Investment Corp is currently generating about 0.02 per unit of volatility. If you would invest  1,550  in SLR Investment Corp on October 6, 2024 and sell it today you would earn a total of  5.00  from holding SLR Investment Corp or generate 0.32% return on investment over 90 days.

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

MICRONIC MYDATA  vs.  SLR Investment Corp

MICRONIC MYDATA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MICRONIC MYDATA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, MICRONIC MYDATA may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SLR Investment Corp

Risk-Adjusted Performance

16 of 100

Good

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. Despite nearly unsteady basic indicators, SLR Investment reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MICRONIC MYDATA and SLR Investment

The main advantage of trading using opposite MICRONIC MYDATA and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MICRONIC MYDATA 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 MICRONIC MYDATA 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.