Correlation Between Falcon Oil and Mulberry Group
Can any of the company-specific risk be diversified away by investing in both Falcon Oil and Mulberry Group 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 Mulberry Group 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 Mulberry Group PLC, you can compare the effects of market volatilities on Falcon Oil and Mulberry Group 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 Mulberry Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Oil and Mulberry Group.
Diversification Opportunities for Falcon Oil and Mulberry Group
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Falcon and Mulberry is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Oil Gas and Mulberry Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mulberry Group PLC 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 Mulberry Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mulberry Group PLC has no effect on the direction of Falcon Oil i.e., Falcon Oil and Mulberry Group go up and down completely randomly.
Pair Corralation between Falcon Oil and Mulberry Group
Assuming the 90 days trading horizon Falcon Oil Gas is expected to generate 0.91 times more return on investment than Mulberry Group. However, Falcon Oil Gas is 1.09 times less risky than Mulberry Group. It trades about -0.03 of its potential returns per unit of risk. Mulberry Group PLC is currently generating about -0.04 per unit of risk. If you would invest 1,025 in Falcon Oil Gas on October 12, 2024 and sell it today you would lose (470.00) from holding Falcon Oil Gas or give up 45.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.98% |
| Values | Daily Returns |
Falcon Oil Gas vs. Mulberry Group PLC
Performance |
| Timeline |
| Falcon Oil Gas |
| Mulberry Group PLC |
Falcon Oil and Mulberry Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Oil and Mulberry Group
The main advantage of trading using opposite Falcon Oil and Mulberry Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Oil position performs unexpectedly, Mulberry Group 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 Mulberry Group will offset losses from the drop in Mulberry Group's long position.| Falcon Oil vs. Europa Metals | Falcon Oil vs. United Internet AG | Falcon Oil vs. Cornish Metals | Falcon Oil vs. Adriatic Metals |
| Mulberry Group vs. Roadside Real Estate | Mulberry Group vs. International Consolidated Airlines | Mulberry Group vs. Norman Broadbent Plc | Mulberry Group vs. Sovereign 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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