Correlation Between Firan Technology and PKSHA TECHNOLOGY

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Can any of the company-specific risk be diversified away by investing in both Firan Technology and PKSHA TECHNOLOGY 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 Firan Technology and PKSHA TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firan Technology Group and PKSHA TECHNOLOGY INC, you can compare the effects of market volatilities on Firan Technology and PKSHA TECHNOLOGY 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 Firan Technology with a short position of PKSHA TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and PKSHA TECHNOLOGY.

Diversification Opportunities for Firan Technology and PKSHA TECHNOLOGY

0.8
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Firan and PKSHA is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and PKSHA TECHNOLOGY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PKSHA TECHNOLOGY INC and Firan Technology 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 Firan Technology Group are associated (or correlated) with PKSHA TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PKSHA TECHNOLOGY INC has no effect on the direction of Firan Technology i.e., Firan Technology and PKSHA TECHNOLOGY go up and down completely randomly.

Pair Corralation between Firan Technology and PKSHA TECHNOLOGY

Assuming the 90 days trading horizon Firan Technology Group is expected to generate 0.61 times more return on investment than PKSHA TECHNOLOGY. However, Firan Technology Group is 1.64 times less risky than PKSHA TECHNOLOGY. It trades about 0.1 of its potential returns per unit of risk. PKSHA TECHNOLOGY INC is currently generating about 0.04 per unit of risk. If you would invest  216.00  in Firan Technology Group on August 31, 2024 and sell it today you would earn a total of  270.00  from holding Firan Technology Group or generate 125.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Firan Technology Group  vs.  PKSHA TECHNOLOGY INC

 Performance 
       Timeline  
Firan Technology 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Firan Technology Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Firan Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.
PKSHA TECHNOLOGY INC 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in PKSHA TECHNOLOGY INC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PKSHA TECHNOLOGY reported solid returns over the last few months and may actually be approaching a breakup point.

Firan Technology and PKSHA TECHNOLOGY Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Firan Technology and PKSHA TECHNOLOGY

The main advantage of trading using opposite Firan Technology and PKSHA TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY will offset losses from the drop in PKSHA TECHNOLOGY's long position.
The idea behind Firan Technology Group and PKSHA TECHNOLOGY INC 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.
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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