Correlation Between Alfa Financial and Firan Technology
Can any of the company-specific risk be diversified away by investing in both Alfa Financial and Firan 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 Alfa Financial and Firan Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and Firan Technology Group, you can compare the effects of market volatilities on Alfa Financial and Firan 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 Alfa Financial with a short position of Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and Firan Technology.
Diversification Opportunities for Alfa Financial and Firan Technology
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alfa and Firan is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology and Alfa Financial 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 Alfa Financial Software are associated (or correlated) with Firan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firan Technology has no effect on the direction of Alfa Financial i.e., Alfa Financial and Firan Technology go up and down completely randomly.
Pair Corralation between Alfa Financial and Firan Technology
Assuming the 90 days trading horizon Alfa Financial Software is expected to under-perform the Firan Technology. In addition to that, Alfa Financial is 1.46 times more volatile than Firan Technology Group. It trades about -0.42 of its total potential returns per unit of risk. Firan Technology Group is currently generating about -0.05 per unit of volatility. If you would invest 488.00 in Firan Technology Group on October 12, 2024 and sell it today you would lose (6.00) from holding Firan Technology Group or give up 1.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Financial Software vs. Firan Technology Group
Performance |
| Timeline |
| Alfa Financial Software |
| Firan Technology |
Alfa Financial and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and Firan Technology
The main advantage of trading using opposite Alfa Financial and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial position performs unexpectedly, Firan 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 Firan Technology will offset losses from the drop in Firan Technology's long position.| Alfa Financial vs. Gruppo Mutuionline SpA | Alfa Financial vs. CompuGroup Medical SE | Alfa Financial vs. ZhongAn Online P | Alfa Financial vs. PULSION Medical Systems |
| Firan Technology vs. MICRONIC MYDATA | Firan Technology vs. NTT DATA | Firan Technology vs. MPH Health Care | Firan Technology vs. China Datang |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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