Correlation Between Qualys and SFL

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

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

Diversification Opportunities for Qualys and SFL

0.69

Correlation Coefficient

Qualys  SFL

Poor diversification

The 3 months correlation between Qualys and SFL is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Qualys Inc and SFL Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFL Corporation and Qualys 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 Qualys Inc 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 Qualys i.e., Qualys and SFL go up and down completely randomly.

Pair Corralation between Qualys and SFL

Given the investment horizon of 90 days Qualys Inc is expected to generate 0.89 times more return on investment than SFL. However, Qualys Inc is 1.12 times less risky than SFL. It trades about -0.06 of its potential returns per unit of risk. SFL Corporation is currently generating about -0.14 per unit of risk. If you would invest  13,983  in Qualys Inc on December 27, 2024 and sell it today you would lose (1,077) from holding Qualys Inc or give up 7.7% of portfolio value over 90 days.

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

Qualys Inc  vs.  SFL Corp.

Qualys Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qualys Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

SFL Corporation

Risk-Adjusted Performance

Very Weak

Over the last 90 days SFL Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Qualys and SFL

The main advantage of trading using opposite Qualys and SFL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qualys 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 Qualys Inc 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.