Correlation Between SFL and 500
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
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 Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
SFL Corp. vs. 500
Performance |
Timeline |
SFL Corporation |
500 |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
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.500 vs. Cementos Pacasmayo SAA | 500 vs. Electrovaya Common Shares | 500 vs. Western Copper And | 500 vs. Olympic Steel |
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 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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