Correlation Between Falcon Energy and Triple Flag

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

By analyzing existing cross correlation between Falcon Energy Materials and Triple Flag Precious, you can compare the effects of market volatilities on Falcon Energy and Triple Flag 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 Energy with a short position of Triple Flag. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Energy and Triple Flag.

Diversification Opportunities for Falcon Energy and Triple Flag

-0.63

Correlation Coefficient

Falcon Energy  Triple Flag

Excellent diversification

The 3 months correlation between Falcon and Triple is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Energy Materials and Triple Flag Precious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triple Flag Precious and Falcon Energy 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 Energy Materials are associated (or correlated) with Triple Flag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triple Flag Precious has no effect on the direction of Falcon Energy i.e., Falcon Energy and Triple Flag go up and down completely randomly.

Pair Corralation between Falcon Energy and Triple Flag

Assuming the 90 days trading horizon Falcon Energy Materials is expected to under-perform the Triple Flag. In addition to that, Falcon Energy is 2.75 times more volatile than Triple Flag Precious. It trades about -0.02 of its total potential returns per unit of risk. Triple Flag Precious is currently generating about 0.22 per unit of volatility. If you would invest  2,181  in Triple Flag Precious on December 24, 2024 and sell it today you would earn a total of  565.00  from holding Triple Flag Precious or generate 25.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Falcon Energy Materials  vs.  Triple Flag Precious

Falcon Energy Materials

Risk-Adjusted Performance

Very Weak

Over the last 90 days Falcon Energy Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Falcon Energy is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Triple Flag Precious

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Triple Flag Precious are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Triple Flag displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Falcon Energy and Triple Flag

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

The idea behind Falcon Energy Materials and Triple Flag Precious 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 CEOs Directory module to screen CEOs from public companies around the world.