Correlation Between SLR Investment and MULTI CHEM

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

Diversification Opportunities for SLR Investment and MULTI CHEM

0.47

Correlation Coefficient

SLR Investment  MULTI CHEM

Very weak diversification

The 3 months correlation between SLR and MULTI is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and MULTI CHEM LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MULTI CHEM LTD 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 MULTI CHEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MULTI CHEM LTD has no effect on the direction of SLR Investment i.e., SLR Investment and MULTI CHEM go up and down completely randomly.

Pair Corralation between SLR Investment and MULTI CHEM

Assuming the 90 days horizon SLR Investment is expected to generate 1.85 times less return on investment than MULTI CHEM. But when comparing it to its historical volatility, SLR Investment Corp is 5.02 times less risky than MULTI CHEM. It trades about 0.17 of its potential returns per unit of risk. MULTI CHEM LTD is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  191.00  in MULTI CHEM LTD on April 21, 2025 and sell it today you would earn a total of  25.00  from holding MULTI CHEM LTD or generate 13.09% return on investment over 90 days.

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

SLR Investment Corp  vs.  MULTI CHEM LTD

SLR Investment Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SLR Investment Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, SLR Investment may actually be approaching a critical reversion point that can send shares even higher in August 2025.

MULTI CHEM LTD

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MULTI CHEM LTD are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MULTI CHEM reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SLR Investment and MULTI CHEM

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

The idea behind SLR Investment Corp and MULTI CHEM LTD 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.