Correlation Between Falcon Energy and Teck Resources
Can any of the company-specific risk be diversified away by investing in both Falcon Energy and Teck Resources 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 Teck Resources 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 Teck Resources Limited, you can compare the effects of market volatilities on Falcon Energy and Teck Resources 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 Teck Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Energy and Teck Resources.
Diversification Opportunities for Falcon Energy and Teck Resources
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Falcon and Teck is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Energy Materials and Teck Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teck Resources 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 Teck Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teck Resources has no effect on the direction of Falcon Energy i.e., Falcon Energy and Teck Resources go up and down completely randomly.
Pair Corralation between Falcon Energy and Teck Resources
Assuming the 90 days trading horizon Falcon Energy Materials is expected to generate 1.72 times more return on investment than Teck Resources. However, Falcon Energy is 1.72 times more volatile than Teck Resources Limited. It trades about 0.04 of its potential returns per unit of risk. Teck Resources Limited is currently generating about 0.04 per unit of risk. If you would invest 64.00 in Falcon Energy Materials on August 26, 2024 and sell it today you would earn a total of 23.00 from holding Falcon Energy Materials or generate 35.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falcon Energy Materials vs. Teck Resources Limited
Performance |
| Timeline |
| Falcon Energy Materials |
| Teck Resources |
Falcon Energy and Teck Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Energy and Teck Resources
The main advantage of trading using opposite Falcon Energy and Teck Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Energy position performs unexpectedly, Teck Resources 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 Teck Resources will offset losses from the drop in Teck Resources' long position.| Falcon Energy vs. Teck Resources Limited | Falcon Energy vs. Ivanhoe Mines | Falcon Energy vs. Filo Mining Corp | Falcon Energy vs. Sigma Lithium Resources |
| Teck Resources vs. First Quantum Minerals | Teck Resources vs. Nutrien | Teck Resources vs. Lundin Mining | Teck Resources vs. Wheaton Precious Metals |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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