Correlation Between Falcon Oil and Bertrandt
Can any of the company-specific risk be diversified away by investing in both Falcon Oil and Bertrandt 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 Oil and Bertrandt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Oil Gas and Bertrandt AG, you can compare the effects of market volatilities on Falcon Oil and Bertrandt 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 Oil with a short position of Bertrandt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Oil and Bertrandt.
Diversification Opportunities for Falcon Oil and Bertrandt
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Falcon and Bertrandt is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Oil Gas and Bertrandt AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bertrandt AG and Falcon Oil 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 Oil Gas are associated (or correlated) with Bertrandt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bertrandt AG has no effect on the direction of Falcon Oil i.e., Falcon Oil and Bertrandt go up and down completely randomly.
Pair Corralation between Falcon Oil and Bertrandt
Assuming the 90 days trading horizon Falcon Oil Gas is expected to generate 1.4 times more return on investment than Bertrandt. However, Falcon Oil is 1.4 times more volatile than Bertrandt AG. It trades about -0.03 of its potential returns per unit of risk. Bertrandt AG is currently generating about -0.12 per unit of risk. If you would invest 675.00 in Falcon Oil Gas on September 12, 2024 and sell it today you would lose (250.00) from holding Falcon Oil Gas or give up 37.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Falcon Oil Gas vs. Bertrandt AG
Performance |
| Timeline |
| Falcon Oil Gas |
| Bertrandt AG |
Falcon Oil and Bertrandt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Oil and Bertrandt
The main advantage of trading using opposite Falcon Oil and Bertrandt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Oil position performs unexpectedly, Bertrandt 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 Bertrandt will offset losses from the drop in Bertrandt's long position.| Falcon Oil vs. PPHE Hotel Group | Falcon Oil vs. Oakley Capital Investments | Falcon Oil vs. Aurora Investment Trust | Falcon Oil vs. Taylor Maritime Investments |
| Bertrandt vs. Finnair Oyj | Bertrandt vs. Broadcom | Bertrandt vs. Norwegian Air Shuttle | Bertrandt vs. Sealed Air 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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