Correlation Between Global Ship and SFL
Can any of the company-specific risk be diversified away by investing in both Global Ship 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 Global Ship and SFL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Ship Lease and SFL Corporation, you can compare the effects of market volatilities on Global Ship 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 Global Ship with a short position of SFL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and SFL.
Diversification Opportunities for Global Ship and SFL
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Global and SFL is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and SFL Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFL Corporation and Global Ship 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 Global Ship Lease 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 Global Ship i.e., Global Ship and SFL go up and down completely randomly.
Pair Corralation between Global Ship and SFL
Considering the 90-day investment horizon Global Ship Lease is expected to under-perform the SFL. In addition to that, Global Ship is 1.19 times more volatile than SFL Corporation. It trades about -0.04 of its total potential returns per unit of risk. SFL Corporation is currently generating about 0.02 per unit of volatility. If you would invest 1,038 in SFL Corporation on November 3, 2024 and sell it today you would earn a total of 17.00 from holding SFL Corporation or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Global Ship Lease vs. SFL Corp.
Performance |
| Timeline |
| Global Ship Lease |
| SFL Corporation |
Global Ship and SFL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and SFL
The main advantage of trading using opposite Global Ship and SFL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship 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.| Global Ship vs. Costamare | Global Ship vs. Navios Maritime Partners | Global Ship vs. Genco Shipping Trading | Global Ship vs. Star Bulk Carriers |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |