Correlation Between Falcon Gold and Palamina Corp
Can any of the company-specific risk be diversified away by investing in both Falcon Gold and Palamina Corp 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 Palamina Corp 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 Palamina Corp, you can compare the effects of market volatilities on Falcon Gold and Palamina Corp 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 Palamina Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Gold and Palamina Corp.
Diversification Opportunities for Falcon Gold and Palamina Corp
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Falcon and Palamina is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Gold Corp and Palamina Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palamina 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 Palamina Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palamina Corp has no effect on the direction of Falcon Gold i.e., Falcon Gold and Palamina Corp go up and down completely randomly.
Pair Corralation between Falcon Gold and Palamina Corp
Assuming the 90 days horizon Falcon Gold is expected to generate 1.57 times less return on investment than Palamina Corp. In addition to that, Falcon Gold is 1.2 times more volatile than Palamina Corp. It trades about 0.02 of its total potential returns per unit of risk. Palamina Corp is currently generating about 0.05 per unit of volatility. If you would invest 6.75 in Palamina Corp on August 29, 2024 and sell it today you would earn a total of 2.12 from holding Palamina Corp or generate 31.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falcon Gold Corp vs. Palamina Corp
Performance |
| Timeline |
| Falcon Gold Corp |
| Palamina Corp |
Falcon Gold and Palamina Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Gold and Palamina Corp
The main advantage of trading using opposite Falcon Gold and Palamina Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Gold position performs unexpectedly, Palamina Corp 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 Palamina Corp will offset losses from the drop in Palamina Corp's 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 |
| Palamina Corp vs. Aurion Resources | Palamina Corp vs. Liberty Gold Corp | Palamina Corp vs. Orezone Gold Corp | Palamina Corp 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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