Correlation Between SFL and DWS
Can any of the company-specific risk be diversified away by investing in both SFL and DWS 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 SFL and DWS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SFL Corporation and DWS, you can compare the effects of market volatilities on SFL and DWS 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 SFL with a short position of DWS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFL and DWS.
Diversification Opportunities for SFL and DWS
Pay attention - limited upside
The 3 months correlation between SFL and DWS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SFL Corp. and DWS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DWS and SFL 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 SFL Corporation are associated (or correlated) with DWS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DWS has no effect on the direction of SFL i.e., SFL and DWS go up and down completely randomly.
Pair Corralation between SFL and DWS
If you would invest 797.00 in SFL Corporation on January 19, 2024 and sell it today you would earn a total of 449.00 from holding SFL Corporation or generate 56.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
SFL Corp. vs. DWS
Performance |
| Timeline |
| SFL Corporation |
| DWS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SFL and DWS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFL and DWS
The main advantage of trading using opposite SFL and DWS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFL position performs unexpectedly, DWS 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 DWS will offset losses from the drop in DWS's long position.The idea behind SFL Corporation and DWS 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.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 the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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