Correlation Between Firan Technology and Hisense Home
Can any of the company-specific risk be diversified away by investing in both Firan Technology and Hisense Home 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 Hisense Home 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 Hisense Home Appliances, you can compare the effects of market volatilities on Firan Technology and Hisense Home 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 Hisense Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and Hisense Home.
Diversification Opportunities for Firan Technology and Hisense Home
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Firan and Hisense is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and Hisense Home Appliances in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hisense Home Appliances 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 Hisense Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hisense Home Appliances has no effect on the direction of Firan Technology i.e., Firan Technology and Hisense Home go up and down completely randomly.
Pair Corralation between Firan Technology and Hisense Home
Assuming the 90 days trading horizon Firan Technology Group is expected to under-perform the Hisense Home. But the stock apears to be less risky and, when comparing its historical volatility, Firan Technology Group is 1.86 times less risky than Hisense Home. The stock trades about -0.07 of its potential returns per unit of risk. The Hisense Home Appliances is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 288.00 in Hisense Home Appliances on October 11, 2024 and sell it today you would earn a total of 31.00 from holding Hisense Home Appliances or generate 10.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Firan Technology Group vs. Hisense Home Appliances
Performance |
| Timeline |
| Firan Technology |
| Hisense Home Appliances |
Firan Technology and Hisense Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firan Technology and Hisense Home
The main advantage of trading using opposite Firan Technology and Hisense Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, Hisense Home 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 Hisense Home will offset losses from the drop in Hisense Home's long position.| Firan Technology vs. Major Drilling Group | Firan Technology vs. WisdomTree Investments | Firan Technology vs. ECHO INVESTMENT ZY | Firan Technology vs. NorAm Drilling AS |
| Hisense Home vs. Man Wah Holdings | Hisense Home vs. Superior Plus Corp | Hisense Home vs. NMI Holdings | Hisense Home vs. SIVERS SEMICONDUCTORS AB |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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