Correlation Between SFL and SOUTHERN
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By analyzing existing cross correlation between SFL Corporation and SOUTHERN CALIF EDISON, you can compare the effects of market volatilities on SFL and SOUTHERN 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 SOUTHERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFL and SOUTHERN.
Diversification Opportunities for SFL and SOUTHERN
Poor diversification
The 3 months correlation between SFL and SOUTHERN is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding SFL Corp. and SOUTHERN CALIF EDISON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHERN CALIF EDISON 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 SOUTHERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHERN CALIF EDISON has no effect on the direction of SFL i.e., SFL and SOUTHERN go up and down completely randomly.
Pair Corralation between SFL and SOUTHERN
Considering the 90-day investment horizon SFL Corporation is expected to generate 1.77 times more return on investment than SOUTHERN. However, SFL is 1.77 times more volatile than SOUTHERN CALIF EDISON. It trades about 0.01 of its potential returns per unit of risk. SOUTHERN CALIF EDISON is currently generating about -0.06 per unit of risk. If you would invest 1,067 in SFL Corporation on September 5, 2024 and sell it today you would earn a total of 2.00 from holding SFL Corporation or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.36% |
| Values | Daily Returns |
SFL Corp. vs. SOUTHERN CALIF EDISON
Performance |
| Timeline |
| SFL Corporation |
| SOUTHERN CALIF EDISON |
SFL and SOUTHERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFL and SOUTHERN
The main advantage of trading using opposite SFL and SOUTHERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFL position performs unexpectedly, SOUTHERN 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 SOUTHERN will offset losses from the drop in SOUTHERN's long position.The idea behind SFL Corporation and SOUTHERN CALIF EDISON 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.| SOUTHERN vs. Aquestive Therapeutics | SOUTHERN vs. The Joint Corp | SOUTHERN vs. Esperion Therapeutics | SOUTHERN vs. SFL Corporation |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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