Correlation Between Falcon Metals and MFF Capital
Can any of the company-specific risk be diversified away by investing in both Falcon Metals and MFF Capital 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 MFF Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Metals and MFF Capital Investments, you can compare the effects of market volatilities on Falcon Metals and MFF Capital 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 MFF Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Metals and MFF Capital.
Diversification Opportunities for Falcon Metals and MFF Capital
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Falcon and MFF is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Metals and MFF Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFF Capital Investments 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 MFF Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFF Capital Investments has no effect on the direction of Falcon Metals i.e., Falcon Metals and MFF Capital go up and down completely randomly.
Pair Corralation between Falcon Metals and MFF Capital
Assuming the 90 days trading horizon Falcon Metals is expected to under-perform the MFF Capital. In addition to that, Falcon Metals is 3.52 times more volatile than MFF Capital Investments. It trades about -0.06 of its total potential returns per unit of risk. MFF Capital Investments is currently generating about 0.17 per unit of volatility. If you would invest 446.00 in MFF Capital Investments on October 12, 2024 and sell it today you would earn a total of 20.00 from holding MFF Capital Investments or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Falcon Metals vs. MFF Capital Investments
Performance |
| Timeline |
| Falcon Metals |
| MFF Capital Investments |
Falcon Metals and MFF Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Metals and MFF Capital
The main advantage of trading using opposite Falcon Metals and MFF Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Metals position performs unexpectedly, MFF Capital 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 MFF Capital will offset losses from the drop in MFF Capital's long position.| Falcon Metals vs. DMC Mining | Falcon Metals vs. Sayona Mining | Falcon Metals vs. Group 6 Metals | Falcon Metals vs. Air New Zealand |
| MFF Capital vs. Bluescope Steel | MFF Capital vs. Stelar Metals | MFF Capital vs. Sky Metals | MFF Capital vs. Falcon 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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