Correlation Between Mastercard and SLR Investment

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

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

Diversification Opportunities for Mastercard and SLR Investment

0.63

Correlation Coefficient

Mastercard  SLR Investment

Poor diversification

The 3 months correlation between Mastercard and SLR is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard 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 Mastercard 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 Mastercard 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 Mastercard i.e., Mastercard and SLR Investment go up and down completely randomly.

Pair Corralation between Mastercard and SLR Investment

Allowing for the 90-day total investment horizon Mastercard is expected to under-perform the SLR Investment. But the stock apears to be less risky and, when comparing its historical volatility, Mastercard is 1.07 times less risky than SLR Investment. The stock trades about -0.02 of its potential returns per unit of risk. The SLR Investment Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  1,561  in SLR Investment Corp on July 31, 2025 and sell it today you would lose (13.00) from holding SLR Investment Corp or give up 0.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Mastercard  vs.  SLR Investment Corp

Mastercard

Risk-Adjusted Performance

Weakest

Over the last 90 days Mastercard has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Mastercard is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Mastercard and SLR Investment

The main advantage of trading using opposite Mastercard and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard 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 Mastercard 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.