Correlation Between SFL and Globus Maritime

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

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

Diversification Opportunities for SFL and Globus Maritime

0.4

Correlation Coefficient

SFL  Globus Maritime

Very weak diversification

The 3 months correlation between SFL and Globus is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding SFL Corp. and Globus Maritime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globus Maritime 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 Globus Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globus Maritime has no effect on the direction of SFL i.e., SFL and Globus Maritime go up and down completely randomly.

Pair Corralation between SFL and Globus Maritime

Considering the 90-day investment horizon SFL Corporation is expected to under-perform the Globus Maritime. But the stock apears to be less risky and, when comparing its historical volatility, SFL Corporation is 1.58 times less risky than Globus Maritime. The stock trades about -0.13 of its potential returns per unit of risk. The Globus Maritime is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  116.00  in Globus Maritime on December 26, 2024 and sell it today you would earn a total of  3.00  from holding Globus Maritime or generate 2.59% return on investment over 90 days.

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

SFL Corp.  vs.  Globus Maritime

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.

Globus Maritime

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Globus Maritime are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental drivers, Globus Maritime is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SFL and Globus Maritime

The main advantage of trading using opposite SFL and Globus Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFL position performs unexpectedly, Globus Maritime 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 Globus Maritime will offset losses from the drop in Globus Maritime's long position.

The idea behind SFL Corporation and Globus Maritime 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.