Correlation Between Firan Technology and Lifeway Foods
Can any of the company-specific risk be diversified away by investing in both Firan Technology and Lifeway Foods 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 Lifeway Foods 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 Lifeway Foods, you can compare the effects of market volatilities on Firan Technology and Lifeway Foods 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 Lifeway Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and Lifeway Foods.
Diversification Opportunities for Firan Technology and Lifeway Foods
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Firan and Lifeway is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and Lifeway Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeway Foods 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 Lifeway Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifeway Foods has no effect on the direction of Firan Technology i.e., Firan Technology and Lifeway Foods go up and down completely randomly.
Pair Corralation between Firan Technology and Lifeway Foods
Assuming the 90 days trading horizon Firan Technology Group is expected to generate 0.71 times more return on investment than Lifeway Foods. However, Firan Technology Group is 1.41 times less risky than Lifeway Foods. It trades about 0.26 of its potential returns per unit of risk. Lifeway Foods is currently generating about -0.06 per unit of risk. If you would invest 474.00 in Firan Technology Group on October 30, 2024 and sell it today you would earn a total of 36.00 from holding Firan Technology Group or generate 7.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firan Technology Group vs. Lifeway Foods
Performance |
| Timeline |
| Firan Technology |
| Lifeway Foods |
Firan Technology and Lifeway Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firan Technology and Lifeway Foods
The main advantage of trading using opposite Firan Technology and Lifeway Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, Lifeway Foods 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 Lifeway Foods will offset losses from the drop in Lifeway Foods' 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 |
| Lifeway Foods vs. General Mills | Lifeway Foods vs. Danone SA | Lifeway Foods vs. Hormel Foods | Lifeway Foods vs. Kellogg Company |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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