Correlation Between SLR Investment and BBB Foods

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

Diversification Opportunities for SLR Investment and BBB Foods

SLRBBBDiversified AwaySLRBBBDiversified Away100%
-0.53
  Correlation Coefficient

Excellent diversification

The 3 months correlation between SLR and BBB is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and BBB Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBB Foods 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 BBB Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBB Foods has no effect on the direction of SLR Investment i.e., SLR Investment and BBB Foods go up and down completely randomly.

Pair Corralation between SLR Investment and BBB Foods

Given the investment horizon of 90 days SLR Investment Corp is expected to generate 0.32 times more return on investment than BBB Foods. However, SLR Investment Corp is 3.16 times less risky than BBB Foods. It trades about 0.2 of its potential returns per unit of risk. BBB Foods is currently generating about -0.06 per unit of risk. If you would invest  1,508  in SLR Investment Corp on October 22, 2024 and sell it today you would earn a total of  167.00  from holding SLR Investment Corp or generate 11.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

SLR Investment Corp  vs.  BBB Foods

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -10-505
JavaScript chart by amCharts 3.21.15SLRC TBBB
       Timeline  
SLR Investment Corp 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in SLR Investment Corp are ranked lower than 15 (%) 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.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1515.51616.5
BBB Foods 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BBB Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan2829303132333435

SLR Investment and BBB Foods Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.6-1.95-1.29-0.640.00.711.432.152.87 0.10.20.30.40.5
JavaScript chart by amCharts 3.21.15SLRC TBBB
       Returns  

Pair Trading with SLR Investment and BBB Foods

The main advantage of trading using opposite SLR Investment and BBB Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, BBB Foods 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 BBB Foods will offset losses from the drop in BBB Foods' long position.
The idea behind SLR Investment Corp and BBB Foods 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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