Correlation Between SFL and Seanergy Maritime

Can any of the company-specific risk be diversified away by investing in both SFL and Seanergy 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 Seanergy 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 Seanergy Maritime Holdings, you can compare the effects of market volatilities on SFL and Seanergy 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 Seanergy Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFL and Seanergy Maritime.

Diversification Opportunities for SFL and Seanergy Maritime

0.85

Correlation Coefficient

SFL  Seanergy Maritime

Very poor diversification

The 3 months correlation between SFL and Seanergy is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding SFL Corp. and Seanergy Maritime Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seanergy 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 Seanergy Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seanergy Maritime has no effect on the direction of SFL i.e., SFL and Seanergy Maritime go up and down completely randomly.

Pair Corralation between SFL and Seanergy Maritime

Considering the 90-day investment horizon SFL Corporation is expected to generate 0.55 times more return on investment than Seanergy Maritime. However, SFL Corporation is 1.81 times less risky than Seanergy Maritime. It trades about -0.07 of its potential returns per unit of risk. Seanergy Maritime Holdings is currently generating about -0.18 per unit of risk. If you would invest  1,121  in SFL Corporation on September 3, 2024 and sell it today you would lose (69.00) from holding SFL Corporation or give up 6.16% of portfolio value over 90 days.

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

SFL Corp.  vs.  Seanergy Maritime Holdings

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 quite persistent technical and fundamental indicators, SFL is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Seanergy Maritime

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seanergy Maritime Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with SFL and Seanergy Maritime

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

The idea behind SFL Corporation and Seanergy Maritime Holdings 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.