Correlation Between SL Private and AJ Bell

Can any of the company-specific risk be diversified away by investing in both SL Private and AJ Bell 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 SL Private and AJ Bell into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SL Private Equity and AJ Bell plc, you can compare the effects of market volatilities on SL Private and AJ Bell 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 SL Private with a short position of AJ Bell. Check out your portfolio center. Please also check ongoing floating volatility patterns of SL Private and AJ Bell.

Diversification Opportunities for SL Private and AJ Bell

-0.56

Correlation Coefficient

SL Private  AJ Bell

Excellent diversification

The 3 months correlation between SLPE and AJB is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding SL Private Equity and AJ Bell plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AJ Bell plc and SL Private 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 SL Private Equity are associated (or correlated) with AJ Bell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AJ Bell plc has no effect on the direction of SL Private i.e., SL Private and AJ Bell go up and down completely randomly.

Pair Corralation between SL Private and AJ Bell

Assuming the 90 days trading horizon SL Private is expected to generate 77.48 times less return on investment than AJ Bell. But when comparing it to its historical volatility, SL Private Equity is 1.61 times less risky than AJ Bell. It trades about 0.0 of its potential returns per unit of risk. AJ Bell plc is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  41,741  in AJ Bell plc on April 24, 2025 and sell it today you would earn a total of  10,409  from holding AJ Bell plc or generate 24.94% return on investment over 90 days.

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

SL Private Equity  vs.  AJ Bell plc

SL Private Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days SL Private Equity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SL Private is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

AJ Bell plc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AJ Bell plc are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, AJ Bell exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SL Private and AJ Bell

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

The idea behind SL Private Equity and AJ Bell plc 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.

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 Global Correlations module to find global opportunities by holding instruments from different markets.