Correlation Between SFL and DISCOVERY
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By analyzing existing cross correlation between SFL Corporation and DISCOVERY MUNICATIONS LLC, you can compare the effects of market volatilities on SFL and DISCOVERY 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 DISCOVERY. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFL and DISCOVERY.
Diversification Opportunities for SFL and DISCOVERY
Very good diversification
The 3 months correlation between SFL and DISCOVERY is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SFL Corp. and DISCOVERY MUNICATIONS LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DISCOVERY MUNICATIONS LLC 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 DISCOVERY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DISCOVERY MUNICATIONS LLC has no effect on the direction of SFL i.e., SFL and DISCOVERY go up and down completely randomly.
Pair Corralation between SFL and DISCOVERY
Considering the 90-day investment horizon SFL Corporation is expected to generate 0.57 times more return on investment than DISCOVERY. However, SFL Corporation is 1.77 times less risky than DISCOVERY. It trades about -0.1 of its potential returns per unit of risk. DISCOVERY MUNICATIONS LLC is currently generating about -0.15 per unit of risk. If you would invest 1,091 in SFL Corporation on September 15, 2024 and sell it today you would lose (93.00) from holding SFL Corporation or give up 8.52% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 46.88% |
Values | Daily Returns |
SFL Corp. vs. DISCOVERY MUNICATIONS LLC
Performance |
Timeline |
SFL Corporation |
DISCOVERY MUNICATIONS LLC |
SFL and DISCOVERY Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SFL and DISCOVERY
The main advantage of trading using opposite SFL and DISCOVERY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFL position performs unexpectedly, DISCOVERY 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 DISCOVERY will offset losses from the drop in DISCOVERY's long position.The idea behind SFL Corporation and DISCOVERY MUNICATIONS LLC 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.DISCOVERY vs. CenterPoint Energy | DISCOVERY vs. Organic Sales and | DISCOVERY vs. Vistra Energy Corp | DISCOVERY vs. 51Talk Online Education |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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