Correlation Between SLR Investment and Apartment Investment

Can any of the company-specific risk be diversified away by investing in both SLR Investment and Apartment 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 SLR Investment and Apartment Investment 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 Apartment Investment and, you can compare the effects of market volatilities on SLR Investment and Apartment 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 SLR Investment with a short position of Apartment Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Apartment Investment.

Diversification Opportunities for SLR Investment and Apartment Investment

0.72

Correlation Coefficient

SLR Investment  Apartment Investment

Poor diversification

The 3 months correlation between SLR and Apartment is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Apartment Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apartment Investment and 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 Apartment Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apartment Investment and has no effect on the direction of SLR Investment i.e., SLR Investment and Apartment Investment go up and down completely randomly.

Pair Corralation between SLR Investment and Apartment Investment

Given the investment horizon of 90 days SLR Investment is expected to generate 1.85 times less return on investment than Apartment Investment. But when comparing it to its historical volatility, SLR Investment Corp is 1.98 times less risky than Apartment Investment. It trades about 0.17 of its potential returns per unit of risk. Apartment Investment and is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  749.00  in Apartment Investment and on December 19, 2024 and sell it today you would earn a total of  126.00  from holding Apartment Investment and or generate 16.82% return on investment over 90 days.

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

SLR Investment Corp  vs.  Apartment Investment and

SLR Investment Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SLR Investment Corp are ranked lower than 13 (%) 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 April 2025.

Apartment Investment and

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apartment Investment and are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward indicators, Apartment Investment showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SLR Investment and Apartment Investment

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

The idea behind SLR Investment Corp and Apartment Investment and 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.