Correlation Between Canada Goose and SFL

Can any of the company-specific risk be diversified away by investing in both Canada Goose 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 Canada Goose and SFL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Canada Goose Holdings and SFL Corporation, you can compare the effects of market volatilities on Canada Goose 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 Canada Goose with a short position of SFL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canada Goose and SFL.

Diversification Opportunities for Canada Goose and SFL

0.9

Correlation Coefficient

Canada Goose  SFL

Almost no diversification

The 3 months correlation between Canada and SFL is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Canada Goose Holdings and SFL Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFL Corporation and Canada Goose 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 Canada Goose Holdings 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 Canada Goose i.e., Canada Goose and SFL go up and down completely randomly.

Pair Corralation between Canada Goose and SFL

Given the investment horizon of 90 days Canada Goose Holdings is expected to generate 2.13 times more return on investment than SFL. However, Canada Goose is 2.13 times more volatile than SFL Corporation. It trades about -0.01 of its potential returns per unit of risk. SFL Corporation is currently generating about -0.1 per unit of risk. If you would invest  1,049  in Canada Goose Holdings on September 14, 2024 and sell it today you would lose (49.00) from holding Canada Goose Holdings or give up 4.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Canada Goose Holdings  vs.  SFL Corp.

Canada Goose Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Canada Goose Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Canada Goose is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

SFL Corporation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SFL Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Canada Goose and SFL

The main advantage of trading using opposite Canada Goose and SFL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canada Goose 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.

The idea behind Canada Goose Holdings and SFL Corporation 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.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.