Correlation Between Falcon Metals and Ampol
Can any of the company-specific risk be diversified away by investing in both Falcon Metals and Ampol 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 Metals and Ampol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Metals and Ampol, you can compare the effects of market volatilities on Falcon Metals and Ampol 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 Metals with a short position of Ampol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Metals and Ampol.
Diversification Opportunities for Falcon Metals and Ampol
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Falcon and Ampol is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Metals and Ampol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampol and Falcon Metals 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 Metals are associated (or correlated) with Ampol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampol has no effect on the direction of Falcon Metals i.e., Falcon Metals and Ampol go up and down completely randomly.
Pair Corralation between Falcon Metals and Ampol
Assuming the 90 days trading horizon Falcon Metals is expected to generate 6.17 times more return on investment than Ampol. However, Falcon Metals is 6.17 times more volatile than Ampol. It trades about 0.03 of its potential returns per unit of risk. Ampol is currently generating about -0.04 per unit of risk. If you would invest 14.00 in Falcon Metals on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Falcon Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Falcon Metals vs. Ampol
Performance |
| Timeline |
| Falcon Metals |
| Ampol |
Falcon Metals and Ampol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Metals and Ampol
The main advantage of trading using opposite Falcon Metals and Ampol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Metals position performs unexpectedly, Ampol 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 Ampol will offset losses from the drop in Ampol's long position.| Falcon Metals vs. National Storage REIT | Falcon Metals vs. Truscott Mining Corp | Falcon Metals vs. Argo Investments | Falcon Metals vs. Dalaroo Metals |
| Ampol vs. BTC Health Limited | Ampol vs. Falcon Metals | Ampol vs. Dalaroo Metals | Ampol vs. Event Hospitality and |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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