Correlation Between Falcon Metals and Group 6
Can any of the company-specific risk be diversified away by investing in both Falcon Metals and Group 6 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 Group 6 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Metals and Group 6 Metals, you can compare the effects of market volatilities on Falcon Metals and Group 6 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 Group 6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Metals and Group 6.
Diversification Opportunities for Falcon Metals and Group 6
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Falcon and Group is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Metals and Group 6 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group 6 Metals 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 Group 6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group 6 Metals has no effect on the direction of Falcon Metals i.e., Falcon Metals and Group 6 go up and down completely randomly.
Pair Corralation between Falcon Metals and Group 6
If you would invest 14.00 in Falcon Metals on September 13, 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falcon Metals vs. Group 6 Metals
Performance |
| Timeline |
| Falcon Metals |
| Group 6 Metals |
Falcon Metals and Group 6 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Metals and Group 6
The main advantage of trading using opposite Falcon Metals and Group 6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Metals position performs unexpectedly, Group 6 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 Group 6 will offset losses from the drop in Group 6's long position.| Falcon Metals vs. Northern Star Resources | Falcon Metals vs. Evolution Mining | Falcon Metals vs. Bluescope Steel | Falcon Metals vs. Sandfire Resources NL |
| Group 6 vs. Perpetual Credit Income | Group 6 vs. Wt Financial Group | Group 6 vs. Hotel Property Investments | Group 6 vs. Bell Financial 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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