Correlation Between United Guardian and SFL
Can any of the company-specific risk be diversified away by investing in both United Guardian and SFL 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 United Guardian and SFL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Guardian and SFL Corporation, you can compare the effects of market volatilities on United Guardian and SFL 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 United Guardian with a short position of SFL. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Guardian and SFL.
Diversification Opportunities for United Guardian and SFL
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and SFL is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding United Guardian and SFL Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFL Corporation and United Guardian 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 United Guardian are associated (or correlated) with SFL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFL Corporation has no effect on the direction of United Guardian i.e., United Guardian and SFL go up and down completely randomly.
Pair Corralation between United Guardian and SFL
Allowing for the 90-day total investment horizon United Guardian is expected to generate 2.53 times less return on investment than SFL. In addition to that, United Guardian is 2.04 times more volatile than SFL Corporation. It trades about 0.01 of its total potential returns per unit of risk. SFL Corporation is currently generating about 0.05 per unit of volatility. If you would invest 799.00 in SFL Corporation on August 27, 2024 and sell it today you would earn a total of 300.00 from holding SFL Corporation or generate 37.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Guardian vs. SFL Corp.
Performance |
| Timeline |
| United Guardian |
| SFL Corporation |
United Guardian and SFL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Guardian and SFL
The main advantage of trading using opposite United Guardian and SFL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Guardian position performs unexpectedly, SFL 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 SFL will offset losses from the drop in SFL's long position.| United Guardian vs. Utah Medical Products | United Guardian vs. Union Bankshares | United Guardian vs. Psychemedics | United Guardian vs. Unity Bancorp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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