Correlation Between OppFi and Peninsula Energy

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

By analyzing existing cross correlation between OppFi Inc and Peninsula Energy, you can compare the effects of market volatilities on OppFi and Peninsula Energy 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 OppFi with a short position of Peninsula Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of OppFi and Peninsula Energy.

Diversification Opportunities for OppFi and Peninsula Energy

0.12

Correlation Coefficient

OppFi  Peninsula Energy

Average diversification

The 3 months correlation between OppFi and Peninsula is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding OppFi Inc and Peninsula Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peninsula Energy and OppFi 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 OppFi Inc are associated (or correlated) with Peninsula Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peninsula Energy has no effect on the direction of OppFi i.e., OppFi and Peninsula Energy go up and down completely randomly.

Pair Corralation between OppFi and Peninsula Energy

Given the investment horizon of 90 days OppFi Inc is expected to generate 0.82 times more return on investment than Peninsula Energy. However, OppFi Inc is 1.21 times less risky than Peninsula Energy. It trades about 0.09 of its potential returns per unit of risk. Peninsula Energy is currently generating about -0.1 per unit of risk. If you would invest  756.00  in OppFi Inc on December 29, 2024 and sell it today you would earn a total of  176.00  from holding OppFi Inc or generate 23.28% return on investment over 90 days.

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

OppFi Inc  vs.  Peninsula Energy

OppFi Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in OppFi Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical and fundamental indicators, OppFi demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Peninsula Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Peninsula Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with OppFi and Peninsula Energy

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

The idea behind OppFi Inc and Peninsula Energy 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.