Correlation Between Falcon Oil and Verizon Communications
Can any of the company-specific risk be diversified away by investing in both Falcon Oil and Verizon Communications 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 Oil and Verizon Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Oil Gas and Verizon Communications CDR, you can compare the effects of market volatilities on Falcon Oil and Verizon Communications 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 Oil with a short position of Verizon Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Oil and Verizon Communications.
Diversification Opportunities for Falcon Oil and Verizon Communications
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Falcon and Verizon is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Oil Gas and Verizon Communications CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verizon Communications and Falcon Oil 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 Oil Gas are associated (or correlated) with Verizon Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verizon Communications has no effect on the direction of Falcon Oil i.e., Falcon Oil and Verizon Communications go up and down completely randomly.
Pair Corralation between Falcon Oil and Verizon Communications
Given the investment horizon of 90 days Falcon Oil Gas is expected to generate 3.08 times more return on investment than Verizon Communications. However, Falcon Oil is 3.08 times more volatile than Verizon Communications CDR. It trades about 0.13 of its potential returns per unit of risk. Verizon Communications CDR is currently generating about -0.1 per unit of risk. If you would invest 16.00 in Falcon Oil Gas on September 11, 2025 and sell it today you would earn a total of 5.00 from holding Falcon Oil Gas or generate 31.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falcon Oil Gas vs. Verizon Communications CDR
Performance |
| Timeline |
| Falcon Oil Gas |
| Verizon Communications |
Falcon Oil and Verizon Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Oil and Verizon Communications
The main advantage of trading using opposite Falcon Oil and Verizon Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Oil position performs unexpectedly, Verizon Communications 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 Verizon Communications will offset losses from the drop in Verizon Communications' long position.| Falcon Oil vs. Sintana Energy | Falcon Oil vs. Petrus Resources | Falcon Oil vs. Kolibri Global Energy | Falcon Oil vs. Hemisphere Energy |
| Verizon Communications vs. Magna Mining | Verizon Communications vs. WORLD ORGANICS INC | Verizon Communications vs. Perseus Mining | Verizon Communications vs. Plaza Retail REIT |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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