Correlation Between Abingdon Health and Falcon Oil
Can any of the company-specific risk be diversified away by investing in both Abingdon Health 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 Abingdon Health and Falcon Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abingdon Health Plc and Falcon Oil Gas, you can compare the effects of market volatilities on Abingdon Health 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 Abingdon Health with a short position of Falcon Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abingdon Health and Falcon Oil.
Diversification Opportunities for Abingdon Health and Falcon Oil
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Abingdon and Falcon is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Abingdon Health Plc 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 Abingdon Health 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 Abingdon Health Plc 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 Abingdon Health i.e., Abingdon Health and Falcon Oil go up and down completely randomly.
Pair Corralation between Abingdon Health and Falcon Oil
Assuming the 90 days trading horizon Abingdon Health Plc is expected to generate 1.34 times more return on investment than Falcon Oil. However, Abingdon Health is 1.34 times more volatile than Falcon Oil Gas. It trades about -0.1 of its potential returns per unit of risk. Falcon Oil Gas is currently generating about -0.15 per unit of risk. If you would invest 1,050 in Abingdon Health Plc on September 3, 2024 and sell it today you would lose (350.00) from holding Abingdon Health Plc or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abingdon Health Plc vs. Falcon Oil Gas
Performance |
| Timeline |
| Abingdon Health Plc |
| Falcon Oil Gas |
Abingdon Health and Falcon Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abingdon Health and Falcon Oil
The main advantage of trading using opposite Abingdon Health and Falcon Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abingdon Health 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.| Abingdon Health vs. CleanTech Lithium plc | Abingdon Health vs. GoldMining | Abingdon Health vs. Panther Metals PLC | Abingdon Health vs. GreenX Metals |
| Falcon Oil vs. Sabien Technology Group | Falcon Oil vs. Flow Traders NV | Falcon Oil vs. Cognizant Technology Solutions | Falcon Oil vs. Auto Trader Group |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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