Correlation Between Slam Corp and Senior Connect

Can any of the company-specific risk be diversified away by investing in both Slam Corp and Senior Connect 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 Slam Corp and Senior Connect into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Slam Corp and Senior Connect Acquisition, you can compare the effects of market volatilities on Slam Corp and Senior Connect 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 Slam Corp with a short position of Senior Connect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Slam Corp and Senior Connect.

Diversification Opportunities for Slam Corp and Senior Connect

0.01

Correlation Coefficient

Slam Corp  Senior Connect

Significant diversification

The 3 months correlation between Slam and Senior is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Slam Corp and Senior Connect Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senior Connect Acqui and Slam Corp 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 Slam Corp are associated (or correlated) with Senior Connect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senior Connect Acqui has no effect on the direction of Slam Corp i.e., Slam Corp and Senior Connect go up and down completely randomly.

Pair Corralation between Slam Corp and Senior Connect

Assuming the 90 days horizon Slam Corp is expected to generate 2.61 times more return on investment than Senior Connect. However, Slam Corp is 2.61 times more volatile than Senior Connect Acquisition. It trades about 0.07 of its potential returns per unit of risk. Senior Connect Acquisition is currently generating about -0.13 per unit of risk. If you would invest  9.00  in Slam Corp on September 13, 2024 and sell it today you would earn a total of  3.00  from holding Slam Corp or generate 33.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	23.89%
Values	Daily Returns

Slam Corp  vs.  Senior Connect Acquisition

Slam Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Slam Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable primary indicators, Slam Corp is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Senior Connect Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Senior Connect Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical indicators, Senior Connect is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Slam Corp and Senior Connect

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

The idea behind Slam Corp and Senior Connect Acquisition 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 Global Correlations module to find global opportunities by holding instruments from different markets.