Correlation Between SLR Investment and Suburban Propane
Can any of the company-specific risk be diversified away by investing in both SLR Investment and Suburban Propane 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 Suburban Propane 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 Suburban Propane Partners, you can compare the effects of market volatilities on SLR Investment and Suburban Propane 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 Suburban Propane. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Suburban Propane.
Diversification Opportunities for SLR Investment and Suburban Propane
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between SLR and Suburban is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Suburban Propane Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suburban Propane Partners 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 Suburban Propane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suburban Propane Partners has no effect on the direction of SLR Investment i.e., SLR Investment and Suburban Propane go up and down completely randomly.
Pair Corralation between SLR Investment and Suburban Propane
Given the investment horizon of 90 days SLR Investment is expected to generate 1.02 times less return on investment than Suburban Propane. But when comparing it to its historical volatility, SLR Investment Corp is 1.68 times less risky than Suburban Propane. It trades about 0.06 of its potential returns per unit of risk. Suburban Propane Partners is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,364 in Suburban Propane Partners on October 10, 2024 and sell it today you would earn a total of 400.00 from holding Suburban Propane Partners or generate 29.33% 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. Suburban Propane Partners
Performance |
Timeline |
SLR Investment Corp |
Suburban Propane Partners |
SLR Investment and Suburban Propane Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SLR Investment and Suburban Propane
The main advantage of trading using opposite SLR Investment and Suburban Propane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, Suburban Propane 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 Suburban Propane will offset losses from the drop in Suburban Propane'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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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