Correlation Between Locafy and SLR Investment

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

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

Diversification Opportunities for Locafy and SLR Investment

-0.35

Correlation Coefficient

Locafy  SLR Investment

Very good diversification

The 3 months correlation between Locafy and SLR is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Locafy and SLR Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLR Investment Corp and Locafy 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 Locafy are associated (or correlated) with SLR Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLR Investment Corp has no effect on the direction of Locafy i.e., Locafy and SLR Investment go up and down completely randomly.

Pair Corralation between Locafy and SLR Investment

Given the investment horizon of 90 days Locafy is expected to generate 9.48 times more return on investment than SLR Investment. However, Locafy is 9.48 times more volatile than SLR Investment Corp. It trades about 0.09 of its potential returns per unit of risk. SLR Investment Corp is currently generating about -0.07 per unit of risk. If you would invest  567.00  in Locafy on July 3, 2025 and sell it today you would earn a total of  165.00  from holding Locafy or generate 29.1% return on investment over 90 days.

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

Locafy  vs.  SLR Investment Corp

Locafy

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Locafy are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Locafy showed solid returns over the last few months and may actually be approaching a breakup point.

SLR Investment Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days SLR Investment Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, SLR Investment is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Locafy and SLR Investment

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

The idea behind Locafy and SLR Investment Corp 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.