Correlation Between Apple and Firan Technology
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and Firan Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Firan Technology Group, you can compare the effects of market volatilities on Apple 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 Apple with a short position of Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Firan Technology.
Diversification Opportunities for Apple and Firan Technology
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apple and Firan is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology and Apple 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 Apple Inc 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 Apple i.e., Apple and Firan Technology go up and down completely randomly.
Pair Corralation between Apple and Firan Technology
Assuming the 90 days trading horizon Apple is expected to generate 2.61 times less return on investment than Firan Technology. But when comparing it to its historical volatility, Apple Inc is 1.64 times less risky than Firan Technology. It trades about 0.08 of its potential returns per unit of risk. Firan Technology Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 129.00 in Firan Technology Group on August 28, 2024 and sell it today you would earn a total of 357.00 from holding Firan Technology Group or generate 276.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Firan Technology Group
Performance |
| Timeline |
| Apple Inc |
| Firan Technology |
Apple and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Firan Technology
The main advantage of trading using opposite Apple and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.The idea behind Apple Inc and Firan Technology Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Firan Technology vs. Apple Inc | Firan Technology vs. Apple Inc | Firan Technology vs. Apple Inc | Firan Technology 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |