Correlation Between Identillect Technologies and Falcon Energy

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

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

Diversification Opportunities for Identillect Technologies and Falcon Energy

0.0

Correlation Coefficient

Identillect Technologies  Falcon Energy

Pay attention - limited upside

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

Pair Corralation between Identillect Technologies and Falcon Energy

Given the investment horizon of 90 days Identillect Technologies Corp is expected to generate 5.98 times more return on investment than Falcon Energy. However, Identillect Technologies is 5.98 times more volatile than Falcon Energy Materials. It trades about 0.1 of its potential returns per unit of risk. Falcon Energy Materials is currently generating about 0.02 per unit of risk. If you would invest  1.00  in Identillect Technologies Corp on September 21, 2024 and sell it today you would lose (0.50) from holding Identillect Technologies Corp or give up 50.0% of portfolio value over 90 days.

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

Identillect Technologies Corp  vs.  Falcon Energy Materials

Identillect Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

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

Falcon Energy Materials

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Falcon Energy Materials are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental indicators, Falcon Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Identillect Technologies and Falcon Energy

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

The idea behind Identillect Technologies Corp and Falcon Energy Materials 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 Commodity Directory module to find actively traded commodities issued by global exchanges.