Correlation Between SFS REAL and C I

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

By analyzing existing cross correlation between SFS REAL ESTATE and C I LEASING, you can compare the effects of market volatilities on SFS REAL and C I 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 SFS REAL with a short position of C I. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFS REAL and C I.

Diversification Opportunities for SFS REAL and C I

-0.54

Correlation Coefficient

SFS REAL  C I

Excellent diversification

The 3 months correlation between SFS and CILEASING is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding SFS REAL ESTATE and C I LEASING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C I LEASING and SFS REAL 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 SFS REAL ESTATE are associated (or correlated) with C I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C I LEASING has no effect on the direction of SFS REAL i.e., SFS REAL and C I go up and down completely randomly.

Pair Corralation between SFS REAL and C I

Assuming the 90 days trading horizon SFS REAL ESTATE is expected to generate 0.33 times more return on investment than C I. However, SFS REAL ESTATE is 3.02 times less risky than C I. It trades about 0.17 of its potential returns per unit of risk. C I LEASING is currently generating about 0.03 per unit of risk. If you would invest  17,945  in SFS REAL ESTATE on December 28, 2024 and sell it today you would earn a total of  2,655  from holding SFS REAL ESTATE or generate 14.8% return on investment over 90 days.

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

SFS REAL ESTATE  vs.  C I LEASING

SFS REAL ESTATE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SFS REAL ESTATE are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent forward indicators, SFS REAL unveiled solid returns over the last few months and may actually be approaching a breakup point.

C I LEASING

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in C I LEASING are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, C I may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with SFS REAL and C I

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

The idea behind SFS REAL ESTATE and C I LEASING 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.