Correlation Between Falcon Power and Amtran Technology
Can any of the company-specific risk be diversified away by investing in both Falcon Power and Amtran Technology 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 Falcon Power and Amtran Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Power Co and Amtran Technology Co, you can compare the effects of market volatilities on Falcon Power and Amtran Technology 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 Falcon Power with a short position of Amtran Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Power and Amtran Technology.
Diversification Opportunities for Falcon Power and Amtran Technology
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Falcon and Amtran is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Power Co and Amtran Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtran Technology and Falcon Power 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 Falcon Power Co are associated (or correlated) with Amtran Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amtran Technology has no effect on the direction of Falcon Power i.e., Falcon Power and Amtran Technology go up and down completely randomly.
Pair Corralation between Falcon Power and Amtran Technology
Assuming the 90 days trading horizon Falcon Power Co is expected to under-perform the Amtran Technology. But the stock apears to be less risky and, when comparing its historical volatility, Falcon Power Co is 1.38 times less risky than Amtran Technology. The stock trades about -0.1 of its potential returns per unit of risk. The Amtran Technology Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,075 in Amtran Technology Co on August 30, 2024 and sell it today you would lose (130.00) from holding Amtran Technology Co or give up 6.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falcon Power Co vs. Amtran Technology Co
Performance |
| Timeline |
| Falcon Power |
| Amtran Technology |
Falcon Power and Amtran Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Power and Amtran Technology
The main advantage of trading using opposite Falcon Power and Amtran Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Power position performs unexpectedly, Amtran Technology 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 Amtran Technology will offset losses from the drop in Amtran Technology's long position.| Falcon Power vs. Lee Chi Enterprises | Falcon Power vs. Fortune Electric Co | Falcon Power vs. Kaulin Mfg | Falcon Power vs. Klingon Aerospace |
| Amtran Technology vs. Yulon Finance Corp | Amtran Technology vs. Taiwan Secom Co | Amtran Technology vs. Great Wall Enterprise |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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