Correlation Between International Seaways and SFL
Can any of the company-specific risk be diversified away by investing in both International Seaways 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 International Seaways and SFL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Seaways and SFL Corporation, you can compare the effects of market volatilities on International Seaways 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 International Seaways with a short position of SFL. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Seaways and SFL.
Diversification Opportunities for International Seaways and SFL
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between International and SFL is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding International Seaways and SFL Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFL Corporation and International Seaways 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 International Seaways 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 International Seaways i.e., International Seaways and SFL go up and down completely randomly.
Pair Corralation between International Seaways and SFL
Given the investment horizon of 90 days International Seaways is expected to generate 1.42 times more return on investment than SFL. However, International Seaways is 1.42 times more volatile than SFL Corporation. It trades about 0.03 of its potential returns per unit of risk. SFL Corporation is currently generating about 0.04 per unit of risk. If you would invest 2,659 in International Seaways on September 21, 2024 and sell it today you would earn a total of 625.00 from holding International Seaways or generate 23.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Seaways vs. SFL Corp.
Performance |
| Timeline |
| International Seaways |
| SFL Corporation |
International Seaways and SFL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Seaways and SFL
The main advantage of trading using opposite International Seaways and SFL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Seaways 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.| International Seaways vs. Teekay Tankers | International Seaways vs. Frontline | International Seaways vs. DHT Holdings | International Seaways vs. Scorpio Tankers |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |