Correlation Between SLS and Decred

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Can any of the company-specific risk be diversified away by investing in both SLS and Decred 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 SLS and Decred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SLS and Decred, you can compare the effects of market volatilities on SLS and Decred 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 SLS with a short position of Decred. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLS and Decred.

Diversification Opportunities for SLS and Decred

  Correlation Coefficient

Significant diversification

The 1 month correlation between SLS and Decred is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding SLS and Decred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Decred and SLS 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 SLS are associated (or correlated) with Decred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Decred has no effect on the direction of SLS i.e., SLS and Decred go up and down completely randomly.

Pair Corralation between SLS and Decred

Assuming the 90 days trading horizon SLS is expected to generate 38.13 times more return on investment than Decred. However, SLS is 38.13 times more volatile than Decred. It trades about 0.38 of its potential returns per unit of risk. Decred is currently generating about -0.13 per unit of risk. If you would invest  47.00  in SLS on September 2, 2022 and sell it today you would earn a total of  644.00  from holding SLS or generate 1370.21% return on investment over 90 days.
Time Period1 Month [change]
DirectionMoves Together 
ValuesDaily Returns

SLS  vs.  Decred

 Performance (%) 
SLS Performance
28 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in SLS are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, SLS sustained solid returns over the last few months and may actually be approaching a breakup point.

SLS Price Channel

Decred Performance
0 of 100
Over the last 90 days Decred has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Crypto's fundamental indicators remain somewhat strong which may send shares a bit higher in January 2023. The current disturbance may also be a sign of long term up-swing for Decred investors.

Decred Price Channel

SLS and Decred Volatility Contrast

   Predicted Return Density   

Pair Trading with SLS and Decred

The main advantage of trading using opposite SLS and Decred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLS position performs unexpectedly, Decred 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 Decred will offset losses from the drop in Decred's long position.
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The idea behind SLS and Decred 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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Check out your portfolio center. 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 Piotroski F Score module to get Piotroski F Score based on binary analysis strategy of nine different fundamentals.

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