Correlation Between Falcon Focus and F/m Investments

Can any of the company-specific risk be diversified away by investing in both Falcon Focus and F/m Investments 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 F/m Investments 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 Fm Investments Large, you can compare the effects of market volatilities on Falcon Focus and F/m Investments 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 F/m Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Focus and F/m Investments.

Diversification Opportunities for Falcon Focus and F/m Investments

0.0

Correlation Coefficient

Falcon Focus  F/m Investments

Pay attention - limited upside

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

Pair Corralation between Falcon Focus and F/m Investments

If you would invest (100.00) in Falcon Focus Scv on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Falcon Focus Scv or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Falcon Focus Scv  vs.  Fm Investments Large

Falcon Focus Scv

Risk-Adjusted Performance

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.

Fm Investments Large

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fm Investments Large has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Falcon Focus and F/m Investments

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

The idea behind Falcon Focus Scv and Fm Investments Large 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.