Correlation Between SFL and LLOYDS
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By analyzing existing cross correlation between SFL Corporation and LLOYDS 675, you can compare the effects of market volatilities on SFL and LLOYDS 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 LLOYDS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFL and LLOYDS.
Diversification Opportunities for SFL and LLOYDS
Very good diversification
The 3 months correlation between SFL and LLOYDS is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding SFL Corp. and LLOYDS 675 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LLOYDS 675 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 LLOYDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LLOYDS 675 has no effect on the direction of SFL i.e., SFL and LLOYDS go up and down completely randomly.
Pair Corralation between SFL and LLOYDS
Considering the 90-day investment horizon SFL Corporation is expected to generate 2.52 times more return on investment than LLOYDS. However, SFL is 2.52 times more volatile than LLOYDS 675. It trades about -0.02 of its potential returns per unit of risk. LLOYDS 675 is currently generating about -0.36 per unit of risk. If you would invest 1,061 in SFL Corporation on September 1, 2024 and sell it today you would lose (9.00) from holding SFL Corporation or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 33.33% |
| Values | Daily Returns |
SFL Corp. vs. LLOYDS 675
Performance |
| Timeline |
| SFL Corporation |
| LLOYDS 675 |
SFL and LLOYDS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFL and LLOYDS
The main advantage of trading using opposite SFL and LLOYDS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFL position performs unexpectedly, LLOYDS 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 LLOYDS will offset losses from the drop in LLOYDS's long position.The idea behind SFL Corporation and LLOYDS 675 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.| LLOYDS vs. SmartStop Self Storage | LLOYDS vs. Minerals Technologies | LLOYDS vs. IPG Photonics | LLOYDS vs. Flexible Solutions 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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