Correlation Between Falcons Beyond and Harte Hanks

Can any of the company-specific risk be diversified away by investing in both Falcons Beyond and Harte Hanks 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 Falcons Beyond and Harte Hanks into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Falcons Beyond Global, and Harte Hanks, you can compare the effects of market volatilities on Falcons Beyond and Harte Hanks 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 Falcons Beyond with a short position of Harte Hanks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcons Beyond and Harte Hanks.

Diversification Opportunities for Falcons Beyond and Harte Hanks

-0.4

Correlation Coefficient

Falcons Beyond  Harte Hanks

Very good diversification

The 3 months correlation between Falcons and Harte is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Falcons Beyond Global, and Harte Hanks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harte Hanks and Falcons Beyond 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 Falcons Beyond Global, are associated (or correlated) with Harte Hanks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harte Hanks has no effect on the direction of Falcons Beyond i.e., Falcons Beyond and Harte Hanks go up and down completely randomly.

Pair Corralation between Falcons Beyond and Harte Hanks

Given the investment horizon of 90 days Falcons Beyond Global, is expected to generate 2.67 times more return on investment than Harte Hanks. However, Falcons Beyond is 2.67 times more volatile than Harte Hanks. It trades about 0.05 of its potential returns per unit of risk. Harte Hanks is currently generating about -0.04 per unit of risk. If you would invest  799.00  in Falcons Beyond Global, on December 28, 2024 and sell it today you would earn a total of  42.00  from holding Falcons Beyond Global, or generate 5.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Falcons Beyond Global,  vs.  Harte Hanks

Falcons Beyond Global,

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Falcons Beyond Global, are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Falcons Beyond exhibited solid returns over the last few months and may actually be approaching a breakup point.

Harte Hanks

Risk-Adjusted Performance

Very Weak

Over the last 90 days Harte Hanks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Falcons Beyond and Harte Hanks

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

The idea behind Falcons Beyond Global, and Harte Hanks 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.