Correlation Between Firan Technology and OPKO HEALTH
Can any of the company-specific risk be diversified away by investing in both Firan Technology and OPKO HEALTH 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 OPKO HEALTH 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 OPKO HEALTH, you can compare the effects of market volatilities on Firan Technology and OPKO HEALTH 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 OPKO HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and OPKO HEALTH.
Diversification Opportunities for Firan Technology and OPKO HEALTH
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Firan and OPKO is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and OPKO HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPKO HEALTH 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 OPKO HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPKO HEALTH has no effect on the direction of Firan Technology i.e., Firan Technology and OPKO HEALTH go up and down completely randomly.
Pair Corralation between Firan Technology and OPKO HEALTH
Assuming the 90 days trading horizon Firan Technology Group is expected to generate 1.55 times more return on investment than OPKO HEALTH. However, Firan Technology is 1.55 times more volatile than OPKO HEALTH. It trades about 0.11 of its potential returns per unit of risk. OPKO HEALTH is currently generating about -0.09 per unit of risk. If you would invest 478.00 in Firan Technology Group on October 28, 2024 and sell it today you would earn a total of 12.00 from holding Firan Technology Group or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firan Technology Group vs. OPKO HEALTH
Performance |
| Timeline |
| Firan Technology |
| OPKO HEALTH |
Firan Technology and OPKO HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firan Technology and OPKO HEALTH
The main advantage of trading using opposite Firan Technology and OPKO HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, OPKO HEALTH 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 OPKO HEALTH will offset losses from the drop in OPKO HEALTH's long position.| Firan Technology vs. Apple Inc | Firan Technology vs. Apple Inc | Firan Technology vs. Apple Inc | Firan Technology vs. Apple Inc |
| OPKO HEALTH vs. Apple Inc | OPKO HEALTH vs. Apple Inc | OPKO HEALTH vs. Apple Inc | OPKO HEALTH vs. Apple Inc |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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