Correlation Between SLR Investment and Silvercrest Asset

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

Diversification Opportunities for SLR Investment and Silvercrest Asset

0.72

Correlation Coefficient

SLR Investment  Silvercrest Asset

Poor diversification

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

Pair Corralation between SLR Investment and Silvercrest Asset

Given the investment horizon of 90 days SLR Investment Corp is expected to generate 0.43 times more return on investment than Silvercrest Asset. However, SLR Investment Corp is 2.34 times less risky than Silvercrest Asset. It trades about 0.22 of its potential returns per unit of risk. Silvercrest Asset Management is currently generating about 0.05 per unit of risk. If you would invest  1,500  in SLR Investment Corp on October 23, 2024 and sell it today you would earn a total of  175.00  from holding SLR Investment Corp or generate 11.67% 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.  Silvercrest Asset Management

SLR Investment Corp

Risk-Adjusted Performance

17 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SLR Investment Corp are ranked lower than 17 (%) 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.

Silvercrest Asset

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Silvercrest Asset Management are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, Silvercrest Asset is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SLR Investment and Silvercrest Asset

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

The idea behind SLR Investment Corp and Silvercrest Asset Management 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.