Correlation Between Danaos and SFL
Can any of the company-specific risk be diversified away by investing in both Danaos and SFL 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 Danaos and SFL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danaos and SFL Corporation, you can compare the effects of market volatilities on Danaos and SFL 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 Danaos with a short position of SFL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danaos and SFL.
Diversification Opportunities for Danaos and SFL
Weak diversification
The 3 months correlation between Danaos and SFL is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Danaos and SFL Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFL Corporation and Danaos 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 Danaos are associated (or correlated) with SFL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFL Corporation has no effect on the direction of Danaos i.e., Danaos and SFL go up and down completely randomly.
Pair Corralation between Danaos and SFL
Considering the 90-day investment horizon Danaos is expected to generate 1.04 times more return on investment than SFL. However, Danaos is 1.04 times more volatile than SFL Corporation. It trades about 0.08 of its potential returns per unit of risk. SFL Corporation is currently generating about 0.05 per unit of risk. If you would invest 4,875 in Danaos on August 27, 2024 and sell it today you would earn a total of 3,716 from holding Danaos or generate 76.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Danaos vs. SFL Corp.
Performance |
| Timeline |
| Danaos |
| SFL Corporation |
Danaos and SFL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danaos and SFL
The main advantage of trading using opposite Danaos and SFL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danaos position performs unexpectedly, SFL 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 SFL will offset losses from the drop in SFL's long position.| Danaos vs. Genco Shipping Trading | Danaos vs. Costamare | Danaos vs. Ardmore Shpng | Danaos vs. Global Ship Lease |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |