Correlation Between Falcon Metals and Commercial Metals
Can any of the company-specific risk be diversified away by investing in both Falcon Metals and Commercial Metals 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 Commercial Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Metals and Commercial Metals, you can compare the effects of market volatilities on Falcon Metals and Commercial Metals 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 Commercial Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Metals and Commercial Metals.
Diversification Opportunities for Falcon Metals and Commercial Metals
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Falcon and Commercial is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Metals and Commercial Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Metals 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 are associated (or correlated) with Commercial Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Metals has no effect on the direction of Falcon Metals i.e., Falcon Metals and Commercial Metals go up and down completely randomly.
Pair Corralation between Falcon Metals and Commercial Metals
Assuming the 90 days trading horizon Falcon Metals is expected to under-perform the Commercial Metals. In addition to that, Falcon Metals is 2.16 times more volatile than Commercial Metals. It trades about -0.14 of its total potential returns per unit of risk. Commercial Metals is currently generating about 0.08 per unit of volatility. If you would invest 5,802 in Commercial Metals on September 4, 2025 and sell it today you would earn a total of 554.00 from holding Commercial Metals or generate 9.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Falcon Metals vs. Commercial Metals
Performance |
| Timeline |
| Falcon Metals |
| Commercial Metals |
Falcon Metals and Commercial Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Metals and Commercial Metals
The main advantage of trading using opposite Falcon Metals and Commercial Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Metals position performs unexpectedly, Commercial Metals 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 Commercial Metals will offset losses from the drop in Commercial Metals' long position.| Falcon Metals vs. Bailador Technology Investments | Falcon Metals vs. Kingsrose Mining | Falcon Metals vs. BKI Investment | Falcon Metals vs. Diversified United Investment |
| Commercial Metals vs. Brandywine Realty Trust | Commercial Metals vs. Ultra Clean Holdings | Commercial Metals vs. BC Technology Group | Commercial Metals vs. Naked Wines plc |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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