Correlation Between Falcon Metals and Fisher Paykel
Can any of the company-specific risk be diversified away by investing in both Falcon Metals and Fisher Paykel 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 Fisher Paykel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Metals and Fisher Paykel Healthcare, you can compare the effects of market volatilities on Falcon Metals and Fisher Paykel 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 Fisher Paykel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Metals and Fisher Paykel.
Diversification Opportunities for Falcon Metals and Fisher Paykel
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Falcon and Fisher is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Metals and Fisher Paykel Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fisher Paykel Healthcare 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 Fisher Paykel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fisher Paykel Healthcare has no effect on the direction of Falcon Metals i.e., Falcon Metals and Fisher Paykel go up and down completely randomly.
Pair Corralation between Falcon Metals and Fisher Paykel
Assuming the 90 days trading horizon Falcon Metals is expected to generate 4.72 times more return on investment than Fisher Paykel. However, Falcon Metals is 4.72 times more volatile than Fisher Paykel Healthcare. It trades about 0.01 of its potential returns per unit of risk. Fisher Paykel Healthcare is currently generating about 0.06 per unit of risk. If you would invest 27.00 in Falcon Metals on October 16, 2024 and sell it today you would lose (14.00) from holding Falcon Metals or give up 51.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falcon Metals vs. Fisher Paykel Healthcare
Performance |
| Timeline |
| Falcon Metals |
| Fisher Paykel Healthcare |
Falcon Metals and Fisher Paykel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Metals and Fisher Paykel
The main advantage of trading using opposite Falcon Metals and Fisher Paykel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Metals position performs unexpectedly, Fisher Paykel 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 Fisher Paykel will offset losses from the drop in Fisher Paykel's long position.| Falcon Metals vs. Nufarm Finance NZ | Falcon Metals vs. Sky Metals | Falcon Metals vs. Hudson Investment Group | Falcon Metals vs. Perseus Mining |
| Fisher Paykel vs. Carawine Resources Limited | Fisher Paykel vs. Falcon Metals | Fisher Paykel vs. ARN Media Limited | Fisher Paykel vs. Centaurus Metals |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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