Correlation Between Falcon Gold and BTU Metals
Can any of the company-specific risk be diversified away by investing in both Falcon Gold and BTU Metals 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 Gold and BTU Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Gold Corp and BTU Metals Corp, you can compare the effects of market volatilities on Falcon Gold and BTU Metals 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 Gold with a short position of BTU Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Gold and BTU Metals.
Diversification Opportunities for Falcon Gold and BTU Metals
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Falcon and BTU is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Gold Corp and BTU Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTU Metals Corp and Falcon Gold 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 Gold Corp are associated (or correlated) with BTU Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTU Metals Corp has no effect on the direction of Falcon Gold i.e., Falcon Gold and BTU Metals go up and down completely randomly.
Pair Corralation between Falcon Gold and BTU Metals
Assuming the 90 days horizon Falcon Gold Corp is expected to under-perform the BTU Metals. In addition to that, Falcon Gold is 6.74 times more volatile than BTU Metals Corp. It trades about -0.07 of its total potential returns per unit of risk. BTU Metals Corp is currently generating about 0.21 per unit of volatility. If you would invest 1.91 in BTU Metals Corp on August 29, 2024 and sell it today you would earn a total of 0.14 from holding BTU Metals Corp or generate 7.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falcon Gold Corp vs. BTU Metals Corp
Performance |
| Timeline |
| Falcon Gold Corp |
| BTU Metals Corp |
Falcon Gold and BTU Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Gold and BTU Metals
The main advantage of trading using opposite Falcon Gold and BTU Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Gold position performs unexpectedly, BTU Metals 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 BTU Metals will offset losses from the drop in BTU Metals' long position.| Falcon Gold vs. Aurion Resources | Falcon Gold vs. Liberty Gold Corp | Falcon Gold vs. Orezone Gold Corp | Falcon Gold vs. Fortuna Silver Mines |
| BTU Metals vs. Aurion Resources | BTU Metals vs. Liberty Gold Corp | BTU Metals vs. Orezone Gold Corp | BTU Metals vs. Fortuna Silver Mines |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Positions Ratings 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 | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |