Correlation Between Trio Petroleum and SFL
Can any of the company-specific risk be diversified away by investing in both Trio Petroleum 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 Trio Petroleum and SFL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trio Petroleum Corp and SFL Corporation, you can compare the effects of market volatilities on Trio Petroleum 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 Trio Petroleum with a short position of SFL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trio Petroleum and SFL.
Diversification Opportunities for Trio Petroleum and SFL
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Trio and SFL is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Trio Petroleum Corp and SFL Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFL Corporation and Trio Petroleum 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 Trio Petroleum Corp 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 Trio Petroleum i.e., Trio Petroleum and SFL go up and down completely randomly.
Pair Corralation between Trio Petroleum and SFL
Given the investment horizon of 90 days Trio Petroleum Corp is expected to under-perform the SFL. In addition to that, Trio Petroleum is 7.57 times more volatile than SFL Corporation. It trades about -0.01 of its total potential returns per unit of risk. SFL Corporation is currently generating about 0.02 per unit of volatility. If you would invest 1,013 in SFL Corporation on September 4, 2024 and sell it today you would earn a total of 56.00 from holding SFL Corporation or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trio Petroleum Corp vs. SFL Corp.
Performance |
| Timeline |
| Trio Petroleum Corp |
| SFL Corporation |
Trio Petroleum and SFL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trio Petroleum and SFL
The main advantage of trading using opposite Trio Petroleum and SFL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trio Petroleum 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.| Trio Petroleum vs. Where Food Comes | Trio Petroleum vs. Q2 Holdings | Trio Petroleum vs. VirnetX Holding Corp | Trio Petroleum vs. Asure Software |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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