Correlation Between All American and Firan Technology
Can any of the company-specific risk be diversified away by investing in both All American 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 All American and Firan Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between All American Gld and Firan Technology Group, you can compare the effects of market volatilities on All American 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 All American with a short position of Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of All American and Firan Technology.
Diversification Opportunities for All American and Firan Technology
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between All and Firan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding All American Gld and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology and All American 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 All American Gld 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 All American i.e., All American and Firan Technology go up and down completely randomly.
Pair Corralation between All American and Firan Technology
Given the investment horizon of 90 days All American Gld is expected to generate 3.69 times more return on investment than Firan Technology. However, All American is 3.69 times more volatile than Firan Technology Group. It trades about 0.08 of its potential returns per unit of risk. Firan Technology Group is currently generating about 0.11 per unit of risk. If you would invest 0.08 in All American Gld on September 4, 2024 and sell it today you would earn a total of 0.02 from holding All American Gld or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
All American Gld vs. Firan Technology Group
Performance |
| Timeline |
| All American Gld |
| Firan Technology |
All American and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with All American and Firan Technology
The main advantage of trading using opposite All American and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if All American 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.| All American vs. Manaris Corp | All American vs. Green Planet Bio | All American vs. Continental Beverage Brands | All American vs. Opus Magnum Ameris |
| Firan Technology vs. Eline Entertainment Group | Firan Technology vs. Green Leaf Innovations | Firan Technology vs. Plandai Biotech | Firan Technology vs. All American Gld |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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