Correlation Between Falcon Oil and Team Internet
Can any of the company-specific risk be diversified away by investing in both Falcon Oil and Team Internet 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 Team Internet 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 Team Internet Group, you can compare the effects of market volatilities on Falcon Oil and Team Internet 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 Team Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Oil and Team Internet.
Diversification Opportunities for Falcon Oil and Team Internet
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Falcon and Team is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Oil Gas and Team Internet Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Team Internet Group 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 Team Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Team Internet Group has no effect on the direction of Falcon Oil i.e., Falcon Oil and Team Internet go up and down completely randomly.
Pair Corralation between Falcon Oil and Team Internet
Assuming the 90 days trading horizon Falcon Oil Gas is expected to under-perform the Team Internet. But the stock apears to be less risky and, when comparing its historical volatility, Falcon Oil Gas is 1.33 times less risky than Team Internet. The stock trades about -0.16 of its potential returns per unit of risk. The Team Internet Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 8,750 in Team Internet Group on September 13, 2024 and sell it today you would earn a total of 650.00 from holding Team Internet Group or generate 7.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falcon Oil Gas vs. Team Internet Group
Performance |
| Timeline |
| Falcon Oil Gas |
| Team Internet Group |
Falcon Oil and Team Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Oil and Team Internet
The main advantage of trading using opposite Falcon Oil and Team Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Oil position performs unexpectedly, Team Internet 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 Team Internet will offset losses from the drop in Team Internet's long position.| Falcon Oil vs. Zoom Video Communications | Falcon Oil vs. Enbridge | Falcon Oil vs. Endo International PLC | Falcon Oil vs. Quantum Blockchain Technologies |
| Team Internet vs. Coor Service Management | Team Internet vs. Ebro Foods | Team Internet vs. Arrow Electronics | Team Internet vs. Hochschild Mining plc |
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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