Correlation Between SFL and Inflection Point
Can any of the company-specific risk be diversified away by investing in both SFL and Inflection Point 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 Inflection Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SFL Corporation and Inflection Point Acquisition, you can compare the effects of market volatilities on SFL and Inflection Point 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 Inflection Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFL and Inflection Point.
Diversification Opportunities for SFL and Inflection Point
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SFL and Inflection is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding SFL Corp. and Inflection Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflection Point Acq 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 Inflection Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflection Point Acq has no effect on the direction of SFL i.e., SFL and Inflection Point go up and down completely randomly.
Pair Corralation between SFL and Inflection Point
Considering the 90-day investment horizon SFL Corporation is expected to under-perform the Inflection Point. In addition to that, SFL is 12.9 times more volatile than Inflection Point Acquisition. It trades about -0.03 of its total potential returns per unit of risk. Inflection Point Acquisition is currently generating about 0.08 per unit of volatility. If you would invest 1,080 in Inflection Point Acquisition on August 25, 2024 and sell it today you would earn a total of 6.00 from holding Inflection Point Acquisition or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SFL Corp. vs. Inflection Point Acquisition
Performance |
| Timeline |
| SFL Corporation |
| Inflection Point Acq |
SFL and Inflection Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFL and Inflection Point
The main advantage of trading using opposite SFL and Inflection Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFL position performs unexpectedly, Inflection Point 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 Inflection Point will offset losses from the drop in Inflection Point's long position.The idea behind SFL Corporation and Inflection Point 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.| Inflection Point vs. PowerUp Acquisition Corp | Inflection Point vs. Aurora Innovation | Inflection Point vs. HUMANA INC | Inflection Point vs. Aquagold International |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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