Correlation Between Turning Point and Falcons Beyond

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

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

Diversification Opportunities for Turning Point and Falcons Beyond

-0.66

Correlation Coefficient

Turning Point  Falcons Beyond

Excellent diversification

The 3 months correlation between Turning and Falcons is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands and Falcons Beyond Global, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcons Beyond Global, and Turning Point 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 Turning Point Brands are associated (or correlated) with Falcons Beyond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcons Beyond Global, has no effect on the direction of Turning Point i.e., Turning Point and Falcons Beyond go up and down completely randomly.

Pair Corralation between Turning Point and Falcons Beyond

Considering the 90-day investment horizon Turning Point Brands is expected to under-perform the Falcons Beyond. But the stock apears to be less risky and, when comparing its historical volatility, Turning Point Brands is 13.89 times less risky than Falcons Beyond. The stock trades about -0.19 of its potential returns per unit of risk. The Falcons Beyond Global, is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  90.00  in Falcons Beyond Global, on October 6, 2024 and sell it today you would earn a total of  1.00  from holding Falcons Beyond Global, or generate 1.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	65.0%
Values	Daily Returns

Turning Point Brands  vs.  Falcons Beyond Global,

Turning Point Brands

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Turning Point Brands are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Turning Point sustained solid returns over the last few months and may actually be approaching a breakup point.

Falcons Beyond Global,

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Falcons Beyond Global, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak fundamental indicators, Falcons Beyond showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turning Point and Falcons Beyond

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

The idea behind Turning Point Brands and Falcons Beyond Global, 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.