Correlation Between Gap, and Trio Petroleum

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

By analyzing existing cross correlation between The Gap, and Trio Petroleum Corp, you can compare the effects of market volatilities on Gap, and Trio Petroleum 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 Gap, with a short position of Trio Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gap, and Trio Petroleum.

Diversification Opportunities for Gap, and Trio Petroleum

-0.78

Correlation Coefficient

Gap,  Trio Petroleum

Pay attention - limited upside

The 3 months correlation between Gap, and Trio is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, and Trio Petroleum Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trio Petroleum Corp and Gap, 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 The Gap, are associated (or correlated) with Trio Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trio Petroleum Corp has no effect on the direction of Gap, i.e., Gap, and Trio Petroleum go up and down completely randomly.

Pair Corralation between Gap, and Trio Petroleum

Considering the 90-day investment horizon The Gap, is expected to under-perform the Trio Petroleum. But the stock apears to be less risky and, when comparing its historical volatility, The Gap, is 8.83 times less risky than Trio Petroleum. The stock trades about -0.07 of its potential returns per unit of risk. The Trio Petroleum Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  118.00  in Trio Petroleum Corp on September 25, 2024 and sell it today you would lose (18.00) from holding Trio Petroleum Corp or give up 15.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

The Gap,  vs.  Trio Petroleum Corp

Gap,

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Gap, reported solid returns over the last few months and may actually be approaching a breakup point.

Trio Petroleum Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trio Petroleum Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Gap, and Trio Petroleum

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

The idea behind The Gap, and Trio Petroleum Corp 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.