Correlation Between FalconStor Software and Great Elm
Can any of the company-specific risk be diversified away by investing in both FalconStor Software and Great Elm 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 FalconStor Software and Great Elm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FalconStor Software and Great Elm Capital, you can compare the effects of market volatilities on FalconStor Software and Great Elm 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 FalconStor Software with a short position of Great Elm. Check out your portfolio center. Please also check ongoing floating volatility patterns of FalconStor Software and Great Elm.
Diversification Opportunities for FalconStor Software and Great Elm
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FalconStor and Great is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding FalconStor Software and Great Elm Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Elm Capital and FalconStor Software 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 FalconStor Software are associated (or correlated) with Great Elm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Elm Capital has no effect on the direction of FalconStor Software i.e., FalconStor Software and Great Elm go up and down completely randomly.
Pair Corralation between FalconStor Software and Great Elm
Given the investment horizon of 90 days FalconStor Software is expected to generate 1.33 times more return on investment than Great Elm. However, FalconStor Software is 1.33 times more volatile than Great Elm Capital. It trades about -0.05 of its potential returns per unit of risk. Great Elm Capital is currently generating about -0.16 per unit of risk. If you would invest 180.00 in FalconStor Software on August 30, 2025 and sell it today you would lose (32.00) from holding FalconStor Software or give up 17.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FalconStor Software vs. Great Elm Capital
Performance |
| Timeline |
| FalconStor Software |
| Great Elm Capital |
FalconStor Software and Great Elm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FalconStor Software and Great Elm
The main advantage of trading using opposite FalconStor Software and Great Elm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FalconStor Software position performs unexpectedly, Great Elm 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 Great Elm will offset losses from the drop in Great Elm's long position.| FalconStor Software vs. Seneca Foods | FalconStor Software vs. Materialise NV | FalconStor Software vs. First Foods Group | FalconStor Software vs. Panache Beverage |
| Great Elm vs. Renesas Electronics | Great Elm vs. Klegg Electronics | Great Elm vs. Spirent Communications plc | Great Elm vs. NorthPoint Communications Group |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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