Correlation Between Falcon Energy and Bce
Can any of the company-specific risk be diversified away by investing in both Falcon Energy and Bce 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 Energy and Bce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Energy Materials and Bce Inc Pref, you can compare the effects of market volatilities on Falcon Energy and Bce 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 Energy with a short position of Bce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Energy and Bce.
Diversification Opportunities for Falcon Energy and Bce
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Falcon and Bce is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Energy Materials and Bce Inc Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bce Inc Pref and Falcon Energy 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 Energy Materials are associated (or correlated) with Bce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bce Inc Pref has no effect on the direction of Falcon Energy i.e., Falcon Energy and Bce go up and down completely randomly.
Pair Corralation between Falcon Energy and Bce
Assuming the 90 days trading horizon Falcon Energy Materials is expected to generate 6.29 times more return on investment than Bce. However, Falcon Energy is 6.29 times more volatile than Bce Inc Pref. It trades about 0.02 of its potential returns per unit of risk. Bce Inc Pref is currently generating about 0.01 per unit of risk. If you would invest 66.00 in Falcon Energy Materials on October 11, 2024 and sell it today you would lose (2.00) from holding Falcon Energy Materials or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falcon Energy Materials vs. Bce Inc Pref
Performance |
| Timeline |
| Falcon Energy Materials |
| Bce Inc Pref |
Falcon Energy and Bce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Energy and Bce
The main advantage of trading using opposite Falcon Energy and Bce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Energy position performs unexpectedly, Bce 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 Bce will offset losses from the drop in Bce's long position.| Falcon Energy vs. Canlan Ice Sports | Falcon Energy vs. NeXGold Mining Corp | Falcon Energy vs. Nicola Mining | Falcon Energy vs. Maple Peak Investments |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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