Correlation Between SFL and BOEING
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By analyzing existing cross correlation between SFL Corporation and BOEING 28 percent, you can compare the effects of market volatilities on SFL and BOEING 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 BOEING. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFL and BOEING.
Diversification Opportunities for SFL and BOEING
Modest diversification
The 3 months correlation between SFL and BOEING is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding SFL Corp. and BOEING 28 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOEING 28 percent 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 BOEING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOEING 28 percent has no effect on the direction of SFL i.e., SFL and BOEING go up and down completely randomly.
Pair Corralation between SFL and BOEING
Considering the 90-day investment horizon SFL Corporation is expected to generate 2.98 times more return on investment than BOEING. However, SFL is 2.98 times more volatile than BOEING 28 percent. It trades about 0.01 of its potential returns per unit of risk. BOEING 28 percent is currently generating about 0.01 per unit of risk. If you would invest 1,024 in SFL Corporation on September 1, 2024 and sell it today you would earn a total of 28.00 from holding SFL Corporation or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.42% |
| Values | Daily Returns |
SFL Corp. vs. BOEING 28 percent
Performance |
| Timeline |
| SFL Corporation |
| BOEING 28 percent |
SFL and BOEING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFL and BOEING
The main advantage of trading using opposite SFL and BOEING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFL position performs unexpectedly, BOEING 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 BOEING will offset losses from the drop in BOEING's long position.The idea behind SFL Corporation and BOEING 28 percent 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.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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