Correlation Between SLR Investment and European Wax
Can any of the company-specific risk be diversified away by investing in both SLR Investment and European Wax 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 European Wax 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 European Wax Center, you can compare the effects of market volatilities on SLR Investment and European Wax 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 European Wax. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and European Wax.
Diversification Opportunities for SLR Investment and European Wax
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SLR and European is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and European Wax Center in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Wax Center 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 European Wax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Wax Center has no effect on the direction of SLR Investment i.e., SLR Investment and European Wax go up and down completely randomly.
Pair Corralation between SLR Investment and European Wax
Given the investment horizon of 90 days SLR Investment Corp is expected to generate 0.22 times more return on investment than European Wax. However, SLR Investment Corp is 4.59 times less risky than European Wax. It trades about 0.17 of its potential returns per unit of risk. European Wax Center is currently generating about -0.05 per unit of risk. If you would invest 1,566 in SLR Investment Corp on December 20, 2024 and sell it today you would earn a total of 141.00 from holding SLR Investment Corp or generate 9.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SLR Investment Corp vs. European Wax Center
Performance |
Timeline |
SLR Investment Corp |
European Wax Center |
SLR Investment and European Wax Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SLR Investment and European Wax
The main advantage of trading using opposite SLR Investment and European Wax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, European Wax 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 European Wax will offset losses from the drop in European Wax's long position.SLR Investment vs. Horizon Technology Finance | SLR Investment vs. WhiteHorse Finance | SLR Investment vs. Gladstone Capital | SLR Investment vs. PennantPark Floating Rate |
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Check out your portfolio center.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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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