Correlation Between Advanced Micro and Falcon Energy
Can any of the company-specific risk be diversified away by investing in both Advanced Micro and Falcon 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 Advanced Micro and Falcon Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and Falcon Energy Materials, you can compare the effects of market volatilities on Advanced Micro and Falcon 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 Advanced Micro with a short position of Falcon Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and Falcon Energy.
Diversification Opportunities for Advanced Micro and Falcon Energy
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Advanced and Falcon is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and Falcon Energy Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcon Energy Materials and Advanced Micro 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 Advanced Micro Devices are associated (or correlated) with Falcon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcon Energy Materials has no effect on the direction of Advanced Micro i.e., Advanced Micro and Falcon Energy go up and down completely randomly.
Pair Corralation between Advanced Micro and Falcon Energy
Assuming the 90 days trading horizon Advanced Micro Devices is expected to under-perform the Falcon Energy. But the stock apears to be less risky and, when comparing its historical volatility, Advanced Micro Devices is 1.6 times less risky than Falcon Energy. The stock trades about -0.3 of its potential returns per unit of risk. The Falcon Energy Materials is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 67.00 in Falcon Energy Materials on August 30, 2024 and sell it today you would earn a total of 17.00 from holding Falcon Energy Materials or generate 25.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Micro Devices vs. Falcon Energy Materials
Performance |
| Timeline |
| Advanced Micro Devices |
| Falcon Energy Materials |
Advanced Micro and Falcon Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and Falcon Energy
The main advantage of trading using opposite Advanced Micro and Falcon Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro position performs unexpectedly, Falcon 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 Falcon Energy will offset losses from the drop in Falcon Energy's long position.| Advanced Micro vs. VIP Entertainment Technologies | Advanced Micro vs. Canadian General Investments | Advanced Micro vs. Perseus Mining | Advanced Micro vs. Western Investment |
| Falcon Energy vs. Data Communications Management | Falcon Energy vs. Lion One Metals | Falcon Energy vs. DIRTT Environmental Solutions | Falcon Energy vs. Arbor Metals Corp |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |