Correlation Between Gamma Communications and Falcon Oil
Can any of the company-specific risk be diversified away by investing in both Gamma Communications and Falcon Oil 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 Gamma Communications and Falcon Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamma Communications PLC and Falcon Oil Gas, you can compare the effects of market volatilities on Gamma Communications and Falcon Oil 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 Gamma Communications with a short position of Falcon Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamma Communications and Falcon Oil.
Diversification Opportunities for Gamma Communications and Falcon Oil
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gamma and Falcon is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Gamma Communications PLC and Falcon Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcon Oil Gas and Gamma Communications 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 Gamma Communications PLC are associated (or correlated) with Falcon Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcon Oil Gas has no effect on the direction of Gamma Communications i.e., Gamma Communications and Falcon Oil go up and down completely randomly.
Pair Corralation between Gamma Communications and Falcon Oil
Assuming the 90 days trading horizon Gamma Communications PLC is expected to generate 0.46 times more return on investment than Falcon Oil. However, Gamma Communications PLC is 2.15 times less risky than Falcon Oil. It trades about 0.04 of its potential returns per unit of risk. Falcon Oil Gas is currently generating about -0.02 per unit of risk. If you would invest 114,072 in Gamma Communications PLC on October 11, 2024 and sell it today you would earn a total of 34,528 from holding Gamma Communications PLC or generate 30.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamma Communications PLC vs. Falcon Oil Gas
Performance |
| Timeline |
| Gamma Communications PLC |
| Falcon Oil Gas |
Gamma Communications and Falcon Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamma Communications and Falcon Oil
The main advantage of trading using opposite Gamma Communications and Falcon Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamma Communications position performs unexpectedly, Falcon Oil 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 Falcon Oil will offset losses from the drop in Falcon Oil's long position.| Gamma Communications vs. LPKF Laser Electronics | Gamma Communications vs. Heavitree Brewery | Gamma Communications vs. PureTech Health plc | Gamma Communications vs. Monster Beverage Corp |
| Falcon Oil vs. Batm Advanced Communications | Falcon Oil vs. First Class Metals | Falcon Oil vs. Capital Metals PLC | Falcon Oil vs. Gamma Communications 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |