Correlation Between Triple Flag and Falcon Energy
Can any of the company-specific risk be diversified away by investing in both Triple Flag and Falcon Energy 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 Triple Flag and Falcon Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triple Flag Precious and Falcon Energy Materials, you can compare the effects of market volatilities on Triple Flag and Falcon Energy 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 Triple Flag with a short position of Falcon Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triple Flag and Falcon Energy.
Diversification Opportunities for Triple Flag and Falcon Energy
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Triple and Falcon is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Triple Flag Precious and Falcon Energy Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcon Energy Materials and Triple Flag 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 Triple Flag Precious are associated (or correlated) with Falcon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcon Energy Materials has no effect on the direction of Triple Flag i.e., Triple Flag and Falcon Energy go up and down completely randomly.
Pair Corralation between Triple Flag and Falcon Energy
Assuming the 90 days trading horizon Triple Flag Precious is expected to generate 0.25 times more return on investment than Falcon Energy. However, Triple Flag Precious is 3.95 times less risky than Falcon Energy. It trades about 0.0 of its potential returns per unit of risk. Falcon Energy Materials is currently generating about -0.1 per unit of risk. If you would invest 2,313 in Triple Flag Precious on October 25, 2024 and sell it today you would lose (12.00) from holding Triple Flag Precious or give up 0.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Triple Flag Precious vs. Falcon Energy Materials
Performance |
| Timeline |
| Triple Flag Precious |
| Falcon Energy Materials |
Triple Flag and Falcon Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triple Flag and Falcon Energy
The main advantage of trading using opposite Triple Flag and Falcon Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triple Flag position performs unexpectedly, Falcon Energy 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 Energy will offset losses from the drop in Falcon Energy's long position.| Triple Flag vs. HOME DEPOT CDR | Triple Flag vs. Champion Gaming Group | Triple Flag vs. Wilmington Capital Management | Triple Flag vs. Calian Technologies |
| Falcon Energy vs. Financial 15 Split | Falcon Energy vs. Precision Drilling | Falcon Energy vs. Atrium Mortgage Investment | Falcon Energy vs. US Financial 15 |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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