Correlation Between Falco Resources and Galan Lithium
Can any of the company-specific risk be diversified away by investing in both Falco Resources and Galan Lithium 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 Galan Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falco Resources and Galan Lithium Limited, you can compare the effects of market volatilities on Falco Resources and Galan Lithium 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 Galan Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falco Resources and Galan Lithium.
Diversification Opportunities for Falco Resources and Galan Lithium
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Falco and Galan is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Falco Resources and Galan Lithium Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galan Lithium Limited 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 Galan Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galan Lithium Limited has no effect on the direction of Falco Resources i.e., Falco Resources and Galan Lithium go up and down completely randomly.
Pair Corralation between Falco Resources and Galan Lithium
Assuming the 90 days horizon Falco Resources is expected to generate 44.13 times less return on investment than Galan Lithium. But when comparing it to its historical volatility, Falco Resources is 1.53 times less risky than Galan Lithium. It trades about 0.01 of its potential returns per unit of risk. Galan Lithium Limited is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Galan Lithium Limited on October 10, 2025 and sell it today you would earn a total of 6.00 from holding Galan Lithium Limited or generate 35.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falco Resources vs. Galan Lithium Limited
Performance |
| Timeline |
| Falco Resources |
| Galan Lithium Limited |
Falco Resources and Galan Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falco Resources and Galan Lithium
The main advantage of trading using opposite Falco Resources and Galan Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falco Resources position performs unexpectedly, Galan Lithium 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 Galan Lithium will offset losses from the drop in Galan Lithium's long position.| Falco Resources vs. Northcliff Resources | Falco Resources vs. Anson Resources Limited | Falco Resources vs. Minsud Resources Corp | Falco Resources vs. Silver X Mining |
| Galan Lithium vs. Hastings Technology Metals | Galan Lithium vs. Blackstone Minerals | Galan Lithium vs. Lithium Ionic Corp | Galan Lithium vs. Anson Resources Limited |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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