Correlation Between Papaya Growth and SFL
Can any of the company-specific risk be diversified away by investing in both Papaya Growth 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 Papaya Growth and SFL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Papaya Growth Opportunity and SFL Corporation, you can compare the effects of market volatilities on Papaya Growth 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 Papaya Growth with a short position of SFL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Papaya Growth and SFL.
Diversification Opportunities for Papaya Growth and SFL
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Papaya and SFL is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Papaya Growth Opportunity and SFL Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFL Corporation and Papaya Growth 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 Papaya Growth Opportunity 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 Papaya Growth i.e., Papaya Growth and SFL go up and down completely randomly.
Pair Corralation between Papaya Growth and SFL
Assuming the 90 days horizon Papaya Growth is expected to generate 2.49 times less return on investment than SFL. But when comparing it to its historical volatility, Papaya Growth Opportunity is 1.24 times less risky than SFL. It trades about 0.02 of its potential returns per unit of risk. SFL Corporation is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 784.00 in SFL Corporation on August 28, 2024 and sell it today you would earn a total of 264.00 from holding SFL Corporation or generate 33.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Papaya Growth Opportunity vs. SFL Corp.
Performance |
| Timeline |
| Papaya Growth Opportunity |
| SFL Corporation |
Papaya Growth and SFL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Papaya Growth and SFL
The main advantage of trading using opposite Papaya Growth and SFL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Papaya Growth 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.| Papaya Growth vs. Aurora Innovation | Papaya Growth vs. HUMANA INC | Papaya Growth vs. Aquagold International | Papaya Growth vs. Barloworld Ltd ADR |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |