Correlation Between Falco Resources and Anglo American
Can any of the company-specific risk be diversified away by investing in both Falco Resources and Anglo American 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 Falco Resources and Anglo American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falco Resources and Anglo American PLC, you can compare the effects of market volatilities on Falco Resources and Anglo American 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 Falco Resources with a short position of Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falco Resources and Anglo American.
Diversification Opportunities for Falco Resources and Anglo American
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Falco and Anglo is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Falco Resources and Anglo American PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo American PLC and Falco Resources 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 Falco Resources are associated (or correlated) with Anglo American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo American PLC has no effect on the direction of Falco Resources i.e., Falco Resources and Anglo American go up and down completely randomly.
Pair Corralation between Falco Resources and Anglo American
Assuming the 90 days horizon Falco Resources is expected to generate 22.24 times more return on investment than Anglo American. However, Falco Resources is 22.24 times more volatile than Anglo American PLC. It trades about 0.14 of its potential returns per unit of risk. Anglo American PLC is currently generating about 0.0 per unit of risk. If you would invest 9.70 in Falco Resources on January 19, 2024 and sell it today you would earn a total of 9.30 from holding Falco Resources or generate 95.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Falco Resources vs. Anglo American PLC
Performance |
| Timeline |
| Falco Resources |
| Anglo American PLC |
Falco Resources and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falco Resources and Anglo American
The main advantage of trading using opposite Falco Resources and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falco Resources position performs unexpectedly, Anglo American 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 Anglo American will offset losses from the drop in Anglo American's long position.| Falco Resources vs. Alumina Limited | Falco Resources vs. HUMANA INC | Falco Resources vs. Aquagold International | Falco Resources vs. Spring Valley Acquisition |
| Anglo American vs. Alumina Limited | Anglo American vs. HUMANA INC | Anglo American vs. Aquagold International | Anglo American vs. Spring Valley Acquisition |
Check out your portfolio center.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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |