Correlation Between Falcon Metals and OOhMedia
Can any of the company-specific risk be diversified away by investing in both Falcon Metals and OOhMedia 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 OOhMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Metals and oOhMedia, you can compare the effects of market volatilities on Falcon Metals and OOhMedia 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 OOhMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Metals and OOhMedia.
Diversification Opportunities for Falcon Metals and OOhMedia
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Falcon and OOhMedia is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Metals and oOhMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on oOhMedia 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 OOhMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of oOhMedia has no effect on the direction of Falcon Metals i.e., Falcon Metals and OOhMedia go up and down completely randomly.
Pair Corralation between Falcon Metals and OOhMedia
Assuming the 90 days trading horizon Falcon Metals is expected to generate 3.84 times more return on investment than OOhMedia. However, Falcon Metals is 3.84 times more volatile than oOhMedia. It trades about 0.02 of its potential returns per unit of risk. oOhMedia is currently generating about 0.01 per unit of risk. If you would invest 22.00 in Falcon Metals on September 12, 2024 and sell it today you would lose (7.00) from holding Falcon Metals or give up 31.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falcon Metals vs. oOhMedia
Performance |
| Timeline |
| Falcon Metals |
| oOhMedia |
Falcon Metals and OOhMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Metals and OOhMedia
The main advantage of trading using opposite Falcon Metals and OOhMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Metals position performs unexpectedly, OOhMedia 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 OOhMedia will offset losses from the drop in OOhMedia's long position.| Falcon Metals vs. EMvision Medical Devices | Falcon Metals vs. Iron Road | Falcon Metals vs. Charter Hall Education | Falcon Metals vs. Medical Developments International |
| OOhMedia vs. Aneka Tambang Tbk | OOhMedia vs. Macquarie Group | OOhMedia vs. Challenger | OOhMedia vs. BHP Group Limited |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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