Correlation Between SLR Investment and NTT DATA

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

Diversification Opportunities for SLR Investment and NTT DATA

0.8

Correlation Coefficient

SLR Investment  NTT DATA

Very poor diversification

The 3 months correlation between SLR and NTT is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and NTT DATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTT DATA 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 NTT DATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTT DATA has no effect on the direction of SLR Investment i.e., SLR Investment and NTT DATA go up and down completely randomly.

Pair Corralation between SLR Investment and NTT DATA

Assuming the 90 days horizon SLR Investment is expected to generate 3.8 times less return on investment than NTT DATA. But when comparing it to its historical volatility, SLR Investment Corp is 3.52 times less risky than NTT DATA. It trades about 0.15 of its potential returns per unit of risk. NTT DATA is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,630  in NTT DATA on April 23, 2025 and sell it today you would earn a total of  610.00  from holding NTT DATA or generate 37.42% return on investment over 90 days.

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

SLR Investment Corp  vs.  NTT DATA

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 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SLR Investment may actually be approaching a critical reversion point that can send shares even higher in August 2025.

NTT DATA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NTT DATA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, NTT DATA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SLR Investment and NTT DATA

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

The idea behind SLR Investment Corp and NTT DATA 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.