Correlation Between Falcons Beyond and Freightcar America
Can any of the company-specific risk be diversified away by investing in both Falcons Beyond and Freightcar America 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 Falcons Beyond and Freightcar America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcons Beyond Global, and Freightcar America, you can compare the effects of market volatilities on Falcons Beyond and Freightcar America 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 Falcons Beyond with a short position of Freightcar America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcons Beyond and Freightcar America.
Diversification Opportunities for Falcons Beyond and Freightcar America
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Falcons and Freightcar is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Falcons Beyond Global, and Freightcar America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freightcar America and Falcons Beyond 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 Falcons Beyond Global, are associated (or correlated) with Freightcar America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freightcar America has no effect on the direction of Falcons Beyond i.e., Falcons Beyond and Freightcar America go up and down completely randomly.
Pair Corralation between Falcons Beyond and Freightcar America
Given the investment horizon of 90 days Falcons Beyond Global, is expected to generate 0.37 times more return on investment than Freightcar America. However, Falcons Beyond Global, is 2.71 times less risky than Freightcar America. It trades about -0.04 of its potential returns per unit of risk. Freightcar America is currently generating about -0.15 per unit of risk. If you would invest 975.00 in Falcons Beyond Global, on August 26, 2024 and sell it today you would lose (45.00) from holding Falcons Beyond Global, or give up 4.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falcons Beyond Global, vs. Freightcar America
Performance |
| Timeline |
| Falcons Beyond Global, |
| Freightcar America |
Falcons Beyond and Freightcar America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcons Beyond and Freightcar America
The main advantage of trading using opposite Falcons Beyond and Freightcar America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcons Beyond position performs unexpectedly, Freightcar America 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 Freightcar America will offset losses from the drop in Freightcar America's long position.| Falcons Beyond vs. Vast Renewables Limited | Falcons Beyond vs. 1847 Holdings LLC | Falcons Beyond vs. Westport Fuel Systems | Falcons Beyond vs. Brookfield Business Partners |
| Freightcar America vs. Greenbrier Companies | Freightcar America vs. LB Foster | Freightcar America vs. Westinghouse Air Brake | Freightcar America vs. CSX Corporation |
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.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Global Correlations Find global opportunities by holding instruments from different markets |