Correlation Between Falcon Metals and Navigator Global

Can any of the company-specific risk be diversified away by investing in both Falcon Metals and Navigator Global 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 Navigator Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Falcon Metals and Navigator Global Investments, you can compare the effects of market volatilities on Falcon Metals and Navigator Global 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 Navigator Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Metals and Navigator Global.

Diversification Opportunities for Falcon Metals and Navigator Global

-0.52

Correlation Coefficient

Falcon Metals  Navigator Global

Excellent diversification

The 3 months correlation between Falcon and Navigator is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Metals and Navigator Global Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navigator Global Inv 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 Navigator Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navigator Global Inv has no effect on the direction of Falcon Metals i.e., Falcon Metals and Navigator Global go up and down completely randomly.

Pair Corralation between Falcon Metals and Navigator Global

Assuming the 90 days trading horizon Falcon Metals is expected to generate 2.06 times more return on investment than Navigator Global. However, Falcon Metals is 2.06 times more volatile than Navigator Global Investments. It trades about 0.07 of its potential returns per unit of risk. Navigator Global Investments is currently generating about 0.04 per unit of risk. If you would invest  12.00  in Falcon Metals on December 30, 2024 and sell it today you would earn a total of  2.00  from holding Falcon Metals or generate 16.67% 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.  Navigator Global Investments

Falcon Metals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Falcon Metals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Falcon Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Navigator Global Inv

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Navigator Global Investments are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Navigator Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Falcon Metals and Navigator Global

The main advantage of trading using opposite Falcon Metals and Navigator Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Metals position performs unexpectedly, Navigator Global 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 Navigator Global will offset losses from the drop in Navigator Global's long position.

The idea behind Falcon Metals and Navigator Global Investments pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..