Correlation Between Safe Bulkers and SFL
Can any of the company-specific risk be diversified away by investing in both Safe Bulkers 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 Safe Bulkers and SFL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safe Bulkers and SFL Corporation, you can compare the effects of market volatilities on Safe Bulkers 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 Safe Bulkers with a short position of SFL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safe Bulkers and SFL.
Diversification Opportunities for Safe Bulkers and SFL
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Safe and SFL is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Safe Bulkers and SFL Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFL Corporation and Safe Bulkers 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 Safe Bulkers 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 Safe Bulkers i.e., Safe Bulkers and SFL go up and down completely randomly.
Pair Corralation between Safe Bulkers and SFL
Assuming the 90 days horizon Safe Bulkers is expected to generate 0.25 times more return on investment than SFL. However, Safe Bulkers is 4.0 times less risky than SFL. It trades about 0.06 of its potential returns per unit of risk. SFL Corporation is currently generating about -0.09 per unit of risk. If you would invest 2,464 in Safe Bulkers on August 24, 2024 and sell it today you would earn a total of 87.00 from holding Safe Bulkers or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 92.8% |
| Values | Daily Returns |
Safe Bulkers vs. SFL Corp.
Performance |
| Timeline |
| Safe Bulkers |
| SFL Corporation |
Safe Bulkers and SFL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safe Bulkers and SFL
The main advantage of trading using opposite Safe Bulkers and SFL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safe Bulkers 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.| Safe Bulkers vs. Safe Bulkers | Safe Bulkers vs. Global Ship Lease | Safe Bulkers vs. Diana Shipping | Safe Bulkers vs. Costamare |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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