Correlation Between SFL and Innovative International
Can any of the company-specific risk be diversified away by investing in both SFL and Innovative International 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 SFL and Innovative International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SFL Corporation and Innovative International Acquisition, you can compare the effects of market volatilities on SFL and Innovative International 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 SFL with a short position of Innovative International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFL and Innovative International.
Diversification Opportunities for SFL and Innovative International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SFL and Innovative is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SFL Corp. and Innovative International Acqui in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative International and SFL 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 SFL Corporation are associated (or correlated) with Innovative International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative International has no effect on the direction of SFL i.e., SFL and Innovative International go up and down completely randomly.
Pair Corralation between SFL and Innovative International
If you would invest (100.00) in Innovative International Acquisition on November 27, 2024 and sell it today you would earn a total of 100.00 from holding Innovative International Acquisition or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
SFL Corp. vs. Innovative International Acqui
Performance |
| Timeline |
| SFL Corporation |
| Innovative International |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
SFL and Innovative International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFL and Innovative International
The main advantage of trading using opposite SFL and Innovative International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFL position performs unexpectedly, Innovative International 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 Innovative International will offset losses from the drop in Innovative International's long position.The idea behind SFL Corporation and Innovative International Acquisition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Innovative International vs. Zhihu Inc ADR | Innovative International vs. Barrick Gold Corp | Innovative International vs. Cheche Group Class | Innovative International vs. Stepan Company |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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