Correlation Between Falcon Metals and EP Financial
Can any of the company-specific risk be diversified away by investing in both Falcon Metals and EP Financial 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 Falcon Metals and EP Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Metals and EP Financial Group, you can compare the effects of market volatilities on Falcon Metals and EP Financial 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 Falcon Metals with a short position of EP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Metals and EP Financial.
Diversification Opportunities for Falcon Metals and EP Financial
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Falcon and EP1 is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Metals and EP Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EP Financial Group and Falcon Metals 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 Falcon Metals are associated (or correlated) with EP Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EP Financial Group has no effect on the direction of Falcon Metals i.e., Falcon Metals and EP Financial go up and down completely randomly.
Pair Corralation between Falcon Metals and EP Financial
Assuming the 90 days trading horizon Falcon Metals is expected to under-perform the EP Financial. In addition to that, Falcon Metals is 1.78 times more volatile than EP Financial Group. It trades about -0.15 of its total potential returns per unit of risk. EP Financial Group is currently generating about 0.06 per unit of volatility. If you would invest 49.00 in EP Financial Group on September 23, 2024 and sell it today you would earn a total of 3.00 from holding EP Financial Group or generate 6.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Falcon Metals vs. EP Financial Group
Performance |
Timeline |
Falcon Metals |
EP Financial Group |
Falcon Metals and EP Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Falcon Metals and EP Financial
The main advantage of trading using opposite Falcon Metals and EP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Metals position performs unexpectedly, EP Financial 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 EP Financial will offset losses from the drop in EP Financial's long position.Falcon Metals vs. Northern Star Resources | Falcon Metals vs. Sandfire Resources NL | Falcon Metals vs. De Grey Mining | Falcon Metals vs. Aneka Tambang Tbk |
EP Financial vs. Readytech Holdings | EP Financial vs. Sky Metals | EP Financial vs. Falcon Metals | EP Financial vs. Stelar Metals |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |