Correlation Between Falcon Metals and Kalgoorlie Gold
Can any of the company-specific risk be diversified away by investing in both Falcon Metals and Kalgoorlie Gold 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 Kalgoorlie Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Metals and Kalgoorlie Gold Mining, you can compare the effects of market volatilities on Falcon Metals and Kalgoorlie Gold 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 Kalgoorlie Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Metals and Kalgoorlie Gold.
Diversification Opportunities for Falcon Metals and Kalgoorlie Gold
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Falcon and Kalgoorlie is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Metals and Kalgoorlie Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalgoorlie Gold Mining 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 Kalgoorlie Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalgoorlie Gold Mining has no effect on the direction of Falcon Metals i.e., Falcon Metals and Kalgoorlie Gold go up and down completely randomly.
Pair Corralation between Falcon Metals and Kalgoorlie Gold
Assuming the 90 days trading horizon Falcon Metals is expected to generate 0.58 times more return on investment than Kalgoorlie Gold. However, Falcon Metals is 1.74 times less risky than Kalgoorlie Gold. It trades about 0.24 of its potential returns per unit of risk. Kalgoorlie Gold Mining is currently generating about -0.11 per unit of risk. If you would invest 12.00 in Falcon Metals on October 29, 2024 and sell it today you would earn a total of 2.00 from holding Falcon Metals or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falcon Metals vs. Kalgoorlie Gold Mining
Performance |
| Timeline |
| Falcon Metals |
| Kalgoorlie Gold Mining |
Falcon Metals and Kalgoorlie Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Metals and Kalgoorlie Gold
The main advantage of trading using opposite Falcon Metals and Kalgoorlie Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Metals position performs unexpectedly, Kalgoorlie Gold 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 Kalgoorlie Gold will offset losses from the drop in Kalgoorlie Gold's long position.| Falcon Metals vs. MetalsGrove Mining | Falcon Metals vs. Saferoads Holdings | Falcon Metals vs. Perseus Mining | Falcon Metals vs. Sun Silver Limited |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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