Correlation Between Falcon Metals and Morgans Hotel

Can any of the company-specific risk be diversified away by investing in both Falcon Metals and Morgans Hotel 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 Morgans Hotel 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 Morgans Hotel Group, you can compare the effects of market volatilities on Falcon Metals and Morgans Hotel 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 Morgans Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Metals and Morgans Hotel.

Diversification Opportunities for Falcon Metals and Morgans Hotel

0.0

Correlation Coefficient

Falcon Metals  Morgans Hotel

Pay attention - limited upside

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

Pair Corralation between Falcon Metals and Morgans Hotel

If you would invest  7.00  in Falcon Metals Limited on March 5, 2024 and sell it today you would earn a total of  0.00  from holding Falcon Metals Limited or generate 0.0% return on investment over 90 days.

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

Falcon Metals Limited  vs.  Morgans Hotel Group

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.

Morgans Hotel Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Morgans Hotel Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Morgans Hotel is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Falcon Metals and Morgans Hotel

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

The idea behind Falcon Metals Limited and Morgans Hotel Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.