Correlation Between Firan Technology and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both Firan Technology and Addus HomeCare 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 Addus HomeCare 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 Addus HomeCare, you can compare the effects of market volatilities on Firan Technology and Addus HomeCare 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 Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and Addus HomeCare.
Diversification Opportunities for Firan Technology and Addus HomeCare
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Firan and Addus is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare 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 Addus HomeCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addus HomeCare has no effect on the direction of Firan Technology i.e., Firan Technology and Addus HomeCare go up and down completely randomly.
Pair Corralation between Firan Technology and Addus HomeCare
Assuming the 90 days trading horizon Firan Technology is expected to generate 1.19 times less return on investment than Addus HomeCare. But when comparing it to its historical volatility, Firan Technology Group is 1.53 times less risky than Addus HomeCare. It trades about 0.13 of its potential returns per unit of risk. Addus HomeCare is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 11,300 in Addus HomeCare on October 30, 2024 and sell it today you would earn a total of 800.00 from holding Addus HomeCare or generate 7.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firan Technology Group vs. Addus HomeCare
Performance |
| Timeline |
| Firan Technology |
| Addus HomeCare |
Firan Technology and Addus HomeCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firan Technology and Addus HomeCare
The main advantage of trading using opposite Firan Technology and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, Addus HomeCare 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 Addus HomeCare will offset losses from the drop in Addus HomeCare's long position.| Firan Technology vs. MidCap Financial Investment | Firan Technology vs. AOYAMA TRADING | Firan Technology vs. MEDCAW INVESTMENTS LS 01 | Firan Technology vs. Guangdong Investment Limited |
| Addus HomeCare vs. Fresenius Medical Care | Addus HomeCare vs. Chemed | Addus HomeCare vs. Superior Plus Corp | Addus HomeCare vs. Origin Agritech |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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