Correlation Between Galiano Gold and Falcon Metals
Can any of the company-specific risk be diversified away by investing in both Galiano Gold and Falcon Metals 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 Galiano Gold and Falcon Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galiano Gold and Falcon Metals Limited, you can compare the effects of market volatilities on Galiano Gold and Falcon Metals 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 Galiano Gold with a short position of Falcon Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galiano Gold and Falcon Metals.
Diversification Opportunities for Galiano Gold and Falcon Metals
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Galiano and Falcon is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Galiano Gold and Falcon Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcon Metals Limited and Galiano Gold 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 Galiano Gold are associated (or correlated) with Falcon Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcon Metals Limited has no effect on the direction of Galiano Gold i.e., Galiano Gold and Falcon Metals go up and down completely randomly.
Pair Corralation between Galiano Gold and Falcon Metals
Considering the 90-day investment horizon Galiano Gold is expected to generate 31.05 times less return on investment than Falcon Metals. But when comparing it to its historical volatility, Galiano Gold is 16.79 times less risky than Falcon Metals. It trades about 0.03 of its potential returns per unit of risk. Falcon Metals Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 8.50 in Falcon Metals Limited on November 9, 2024 and sell it today you would lose (1.50) from holding Falcon Metals Limited or give up 17.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galiano Gold vs. Falcon Metals Limited
Performance |
| Timeline |
| Galiano Gold |
| Falcon Metals Limited |
Galiano Gold and Falcon Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galiano Gold and Falcon Metals
The main advantage of trading using opposite Galiano Gold and Falcon Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galiano Gold position performs unexpectedly, Falcon Metals 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 Metals will offset losses from the drop in Falcon Metals' long position.| Galiano Gold vs. Avino Silver Gold | Galiano Gold vs. Americas Silver Corp | Galiano Gold vs. Paramount Gold Nevada | Galiano Gold vs. Fury Gold Mines |
| Falcon Metals vs. Almadex Minerals | Falcon Metals vs. Revival Gold | Falcon Metals vs. Galiano Gold | Falcon Metals vs. US Gold 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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