Correlation Between SL Private and Falcon Oil

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

By analyzing existing cross correlation between SL Private Equity and Falcon Oil Gas, you can compare the effects of market volatilities on SL Private and Falcon Oil 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 SL Private with a short position of Falcon Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of SL Private and Falcon Oil.

Diversification Opportunities for SL Private and Falcon Oil

-0.39

Correlation Coefficient

SL Private  Falcon Oil

Very good diversification

The 3 months correlation between SLPE and Falcon is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding SL Private Equity and Falcon Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcon Oil Gas and SL Private 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 SL Private Equity are associated (or correlated) with Falcon Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcon Oil Gas has no effect on the direction of SL Private i.e., SL Private and Falcon Oil go up and down completely randomly.

Pair Corralation between SL Private and Falcon Oil

Assuming the 90 days trading horizon SL Private Equity is expected to under-perform the Falcon Oil. But the stock apears to be less risky and, when comparing its historical volatility, SL Private Equity is 3.3 times less risky than Falcon Oil. The stock trades about -0.03 of its potential returns per unit of risk. The Falcon Oil Gas is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  625.00  in Falcon Oil Gas on April 23, 2025 and sell it today you would earn a total of  35.00  from holding Falcon Oil Gas or generate 5.6% return on investment over 90 days.

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

SL Private Equity  vs.  Falcon Oil Gas

SL Private Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days SL Private Equity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SL Private is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Falcon Oil Gas

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Falcon Oil Gas are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Falcon Oil may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with SL Private and Falcon Oil

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

The idea behind SL Private Equity and Falcon Oil Gas 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.