Correlation Between Gtn and Falcon Metals
Can any of the company-specific risk be diversified away by investing in both Gtn 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 Gtn and Falcon Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gtn and Falcon Metals, you can compare the effects of market volatilities on Gtn 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 Gtn with a short position of Falcon Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gtn and Falcon Metals.
Diversification Opportunities for Gtn and Falcon Metals
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gtn and Falcon is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Gtn and Falcon Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcon Metals and Gtn 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 Gtn 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 has no effect on the direction of Gtn i.e., Gtn and Falcon Metals go up and down completely randomly.
Pair Corralation between Gtn and Falcon Metals
Assuming the 90 days trading horizon Gtn is expected to generate 0.43 times more return on investment than Falcon Metals. However, Gtn is 2.31 times less risky than Falcon Metals. It trades about 0.03 of its potential returns per unit of risk. Falcon Metals is currently generating about -0.01 per unit of risk. If you would invest 46.00 in Gtn on December 12, 2024 and sell it today you would earn a total of 10.00 from holding Gtn or generate 21.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Gtn vs. Falcon Metals
Performance |
| Timeline |
| Gtn |
| Falcon Metals |
Gtn and Falcon Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gtn and Falcon Metals
The main advantage of trading using opposite Gtn and Falcon Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gtn 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.| Gtn vs. National Storage REIT | ||
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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