Correlation Between SLR Investment and Vinci Partners

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

Diversification Opportunities for SLR Investment and Vinci Partners

0.29

Correlation Coefficient

SLR Investment  Vinci Partners

Modest diversification

The 3 months correlation between SLR and Vinci is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Vinci Partners Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinci Partners Inves 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 Vinci Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinci Partners Inves has no effect on the direction of SLR Investment i.e., SLR Investment and Vinci Partners go up and down completely randomly.

Pair Corralation between SLR Investment and Vinci Partners

Given the investment horizon of 90 days SLR Investment Corp is expected to generate 0.6 times more return on investment than Vinci Partners. However, SLR Investment Corp is 1.67 times less risky than Vinci Partners. It trades about 0.24 of its potential returns per unit of risk. Vinci Partners Investments is currently generating about -0.1 per unit of risk. If you would invest  1,501  in SLR Investment Corp on October 7, 2024 and sell it today you would earn a total of  140.00  from holding SLR Investment Corp or generate 9.33% return on investment over 90 days.

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

SLR Investment Corp  vs.  Vinci Partners Investments

SLR Investment Corp

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SLR Investment Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, SLR Investment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Vinci Partners Inves

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vinci Partners Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Vinci Partners is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with SLR Investment and Vinci Partners

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

The idea behind SLR Investment Corp and Vinci Partners Investments 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.