Correlation Between Trinity Capital and XAI Octagon
Can any of the company-specific risk be diversified away by investing in both Trinity Capital and XAI Octagon 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 Trinity Capital and XAI Octagon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trinity Capital and XAI Octagon Floating, you can compare the effects of market volatilities on Trinity Capital and XAI Octagon 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 Trinity Capital with a short position of XAI Octagon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trinity Capital and XAI Octagon.
Diversification Opportunities for Trinity Capital and XAI Octagon
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Trinity and XAI is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Trinity Capital and XAI Octagon Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XAI Octagon Floating and Trinity Capital 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 Trinity Capital are associated (or correlated) with XAI Octagon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XAI Octagon Floating has no effect on the direction of Trinity Capital i.e., Trinity Capital and XAI Octagon go up and down completely randomly.
Pair Corralation between Trinity Capital and XAI Octagon
Given the investment horizon of 90 days Trinity Capital is expected to generate 0.74 times more return on investment than XAI Octagon. However, Trinity Capital is 1.35 times less risky than XAI Octagon. It trades about 0.22 of its potential returns per unit of risk. XAI Octagon Floating is currently generating about -0.1 per unit of risk. If you would invest 1,461 in Trinity Capital on November 2, 2024 and sell it today you would earn a total of 45.00 from holding Trinity Capital or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trinity Capital vs. XAI Octagon Floating
Performance |
| Timeline |
| Trinity Capital |
| XAI Octagon Floating |
Trinity Capital and XAI Octagon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trinity Capital and XAI Octagon
The main advantage of trading using opposite Trinity Capital and XAI Octagon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trinity Capital position performs unexpectedly, XAI Octagon 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 XAI Octagon will offset losses from the drop in XAI Octagon's long position.| Trinity Capital vs. Carlyle Secured Lending | Trinity Capital vs. Sixth Street Specialty | Trinity Capital vs. Hercules Capital | Trinity Capital vs. BlackRock TCP Capital |
| XAI Octagon vs. Oxford Lane Capital | XAI Octagon vs. Capital Southwest | XAI Octagon vs. Cornerstone Strategic Return | XAI Octagon vs. Cornerstone Strategic Value |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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