Correlation Between Wizz Air and Falcon Oil
Can any of the company-specific risk be diversified away by investing in both Wizz Air 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 Wizz Air and Falcon Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wizz Air Holdings and Falcon Oil Gas, you can compare the effects of market volatilities on Wizz Air 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 Wizz Air with a short position of Falcon Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and Falcon Oil.
Diversification Opportunities for Wizz Air and Falcon Oil
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wizz and Falcon is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings 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 Wizz Air 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 Wizz Air Holdings 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 Wizz Air i.e., Wizz Air and Falcon Oil go up and down completely randomly.
Pair Corralation between Wizz Air and Falcon Oil
Assuming the 90 days trading horizon Wizz Air Holdings is expected to generate 1.94 times more return on investment than Falcon Oil. However, Wizz Air is 1.94 times more volatile than Falcon Oil Gas. It trades about -0.05 of its potential returns per unit of risk. Falcon Oil Gas is currently generating about -0.16 per unit of risk. If you would invest 223,200 in Wizz Air Holdings on September 24, 2024 and sell it today you would lose (78,900) from holding Wizz Air Holdings or give up 35.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wizz Air Holdings vs. Falcon Oil Gas
Performance |
| Timeline |
| Wizz Air Holdings |
| Falcon Oil Gas |
Wizz Air and Falcon Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wizz Air and Falcon Oil
The main advantage of trading using opposite Wizz Air and Falcon Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wizz Air 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.| Wizz Air vs. International Biotechnology Trust | Wizz Air vs. Sunny Optical Technology | Wizz Air vs. Spotify Technology SA | Wizz Air vs. Cizzle Biotechnology Holdings |
| Falcon Oil vs. Zoom Video Communications | Falcon Oil vs. Enbridge | Falcon Oil vs. Endo International PLC | Falcon Oil vs. XLMedia 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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