Correlation Between SFL and 500

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Can any of the company-specific risk be diversified away by investing in both SFL and 500 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 500 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SFL Corporation and 500, you can compare the effects of market volatilities on SFL and 500 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 500. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFL and 500.

Diversification Opportunities for SFL and 500

0.0
  Correlation Coefficient
 SFL
 500

Pay attention - limited upside

The 3 months correlation between SFL and 500 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SFL Corp. and 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 500 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 500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 500 has no effect on the direction of SFL i.e., SFL and 500 go up and down completely randomly.

Pair Corralation between SFL and 500

If you would invest  1,042  in SFL Corporation on December 29, 2023 and sell it today you would earn a total of  270.00  from holding SFL Corporation or generate 25.91% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

SFL Corp.  vs.  500

 Performance 
       Timeline  
SFL Corporation 

Risk-Adjusted Performance

16 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in SFL Corporation are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, SFL disclosed solid returns over the last few months and may actually be approaching a breakup point.
500 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days 500 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, 500 is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

SFL and 500 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SFL and 500

The main advantage of trading using opposite SFL and 500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFL position performs unexpectedly, 500 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 500 will offset losses from the drop in 500's long position.
The idea behind SFL Corporation and 500 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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