Correlation Between Falcon Focus and Eic Value

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

By analyzing existing cross correlation between Falcon Focus Scv and Eic Value Fund, you can compare the effects of market volatilities on Falcon Focus and Eic Value 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 Focus with a short position of Eic Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Focus and Eic Value.

Diversification Opportunities for Falcon Focus and Eic Value

0.0

Correlation Coefficient

Falcon Focus  Eic Value

Pay attention - limited upside

The 3 months correlation between Falcon and Eic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Focus Scv and Eic Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eic Value Fund and Falcon Focus 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 Focus Scv are associated (or correlated) with Eic Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eic Value Fund has no effect on the direction of Falcon Focus i.e., Falcon Focus and Eic Value go up and down completely randomly.

Pair Corralation between Falcon Focus and Eic Value

Assuming the 90 days horizon Falcon Focus is expected to generate 2.26 times less return on investment than Eic Value. But when comparing it to its historical volatility, Falcon Focus Scv is 1.01 times less risky than Eic Value. It trades about 0.03 of its potential returns per unit of risk. Eic Value Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,588  in Eic Value Fund on September 22, 2024 and sell it today you would earn a total of  84.00  from holding Eic Value Fund or generate 5.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.64%
Values	Daily Returns

Falcon Focus Scv  vs.  Eic Value Fund

Falcon Focus Scv

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Falcon Focus Scv has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Falcon Focus is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eic Value Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eic Value Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Eic Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Falcon Focus and Eic Value

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

The idea behind Falcon Focus Scv and Eic Value Fund 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.