Correlation Between Falcon Energy and GOLDMAN SACHS
Can any of the company-specific risk be diversified away by investing in both Falcon Energy and GOLDMAN SACHS 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 GOLDMAN SACHS 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 GOLDMAN SACHS CDR, you can compare the effects of market volatilities on Falcon Energy and GOLDMAN SACHS 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 GOLDMAN SACHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Energy and GOLDMAN SACHS.
Diversification Opportunities for Falcon Energy and GOLDMAN SACHS
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Falcon and GOLDMAN is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Energy Materials and GOLDMAN SACHS CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLDMAN SACHS CDR 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 GOLDMAN SACHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLDMAN SACHS CDR has no effect on the direction of Falcon Energy i.e., Falcon Energy and GOLDMAN SACHS go up and down completely randomly.
Pair Corralation between Falcon Energy and GOLDMAN SACHS
Assuming the 90 days trading horizon Falcon Energy Materials is expected to generate 1.47 times more return on investment than GOLDMAN SACHS. However, Falcon Energy is 1.47 times more volatile than GOLDMAN SACHS CDR. It trades about 0.24 of its potential returns per unit of risk. GOLDMAN SACHS CDR is currently generating about 0.22 per unit of risk. If you would invest 67.00 in Falcon Energy Materials on August 30, 2024 and sell it today you would earn a total of 17.00 from holding Falcon Energy Materials or generate 25.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falcon Energy Materials vs. GOLDMAN SACHS CDR
Performance |
| Timeline |
| Falcon Energy Materials |
| GOLDMAN SACHS CDR |
Falcon Energy and GOLDMAN SACHS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Energy and GOLDMAN SACHS
The main advantage of trading using opposite Falcon Energy and GOLDMAN SACHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Energy position performs unexpectedly, GOLDMAN SACHS 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 GOLDMAN SACHS will offset losses from the drop in GOLDMAN SACHS's long position.| Falcon Energy vs. Data Communications Management | Falcon Energy vs. Lion One Metals | Falcon Energy vs. DIRTT Environmental Solutions | Falcon Energy vs. Arbor Metals Corp |
| GOLDMAN SACHS vs. Western Copper and | GOLDMAN SACHS vs. Maple Leaf Foods | GOLDMAN SACHS vs. Labrador Iron Ore | GOLDMAN SACHS vs. Profound Medical Corp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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