Correlation Between Falcon Metals and Probe Metals

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

By analyzing existing cross correlation between Falcon Metals Limited and Probe Metals, you can compare the effects of market volatilities on Falcon Metals and Probe 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 Probe Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Metals and Probe Metals.

Diversification Opportunities for Falcon Metals and Probe Metals

-0.51

Correlation Coefficient

Falcon Metals  Probe Metals

Excellent diversification

The 3 months correlation between Falcon and Probe is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Metals Limited and Probe Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Probe 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 Limited are associated (or correlated) with Probe Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Probe Metals has no effect on the direction of Falcon Metals i.e., Falcon Metals and Probe Metals go up and down completely randomly.

Pair Corralation between Falcon Metals and Probe Metals

Assuming the 90 days horizon Falcon Metals Limited is expected to generate 5.85 times more return on investment than Probe Metals. However, Falcon Metals is 5.85 times more volatile than Probe Metals. It trades about 0.08 of its potential returns per unit of risk. Probe Metals is currently generating about 0.12 per unit of risk. If you would invest  13.00  in Falcon Metals Limited on August 26, 2025 and sell it today you would lose (12.82) from holding Falcon Metals Limited or give up 98.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Falcon Metals Limited  vs.  Probe Metals

Falcon Metals Limited

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Falcon Metals Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Falcon Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Probe Metals

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Probe Metals are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental drivers, Probe Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Falcon Metals and Probe Metals

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

The idea behind Falcon Metals Limited and Probe Metals 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.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.