Correlation Between SLR Investment and Nuveen Select

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

Diversification Opportunities for SLR Investment and Nuveen Select

-0.58

Correlation Coefficient

SLR Investment  Nuveen Select

Excellent diversification

The 3 months correlation between SLR and Nuveen is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Nuveen Select Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Select Tax 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 Nuveen Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Select Tax has no effect on the direction of SLR Investment i.e., SLR Investment and Nuveen Select go up and down completely randomly.

Pair Corralation between SLR Investment and Nuveen Select

Given the investment horizon of 90 days SLR Investment Corp is expected to under-perform the Nuveen Select. In addition to that, SLR Investment is 2.46 times more volatile than Nuveen Select Tax Free. It trades about -0.03 of its total potential returns per unit of risk. Nuveen Select Tax Free is currently generating about 0.17 per unit of volatility. If you would invest  1,378  in Nuveen Select Tax Free on August 26, 2025 and sell it today you would earn a total of  71.00  from holding Nuveen Select Tax Free or generate 5.15% return on investment over 90 days.

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

SLR Investment Corp  vs.  Nuveen Select Tax Free

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

Nuveen Select Tax

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Select Tax Free are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Nuveen Select is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with SLR Investment and Nuveen Select

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

The idea behind SLR Investment Corp and Nuveen Select Tax Free 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.