Correlation Between Falcon Metals and Getty Copper

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

By analyzing existing cross correlation between Falcon Metals Limited and Getty Copper, you can compare the effects of market volatilities on Falcon Metals and Getty Copper 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 Metals with a short position of Getty Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Metals and Getty Copper.

Diversification Opportunities for Falcon Metals and Getty Copper

0.0

Correlation Coefficient

Falcon Metals  Getty Copper

Pay attention - limited upside

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

Pair Corralation between Falcon Metals and Getty Copper

Assuming the 90 days horizon Falcon Metals Limited is expected to generate 1.05 times more return on investment than Getty Copper. However, Falcon Metals is 1.05 times more volatile than Getty Copper. It trades about 0.01 of its potential returns per unit of risk. Getty Copper is currently generating about 0.0 per unit of risk. If you would invest  18.00  in Falcon Metals Limited on February 5, 2024 and sell it today you would lose (11.00) from holding Falcon Metals Limited or give up 61.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Falcon Metals Limited  vs.  Getty Copper

Falcon Metals Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Falcon Metals Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Falcon Metals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Getty Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getty Copper has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Getty Copper is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Falcon Metals and Getty Copper

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

The idea behind Falcon Metals Limited and Getty Copper 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.