Correlation Between Austal and Firan Technology
Can any of the company-specific risk be diversified away by investing in both Austal 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 Austal and Firan Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Austal Limited and Firan Technology Group, you can compare the effects of market volatilities on Austal 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 Austal with a short position of Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austal and Firan Technology.
Diversification Opportunities for Austal and Firan Technology
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Austal and Firan is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Austal Limited and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology and Austal 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 Austal Limited 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 Austal i.e., Austal and Firan Technology go up and down completely randomly.
Pair Corralation between Austal and Firan Technology
Assuming the 90 days horizon Austal Limited is expected to generate 1.74 times more return on investment than Firan Technology. However, Austal is 1.74 times more volatile than Firan Technology Group. It trades about -0.01 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 200.00 in Austal Limited on October 23, 2024 and sell it today you would lose (3.00) from holding Austal Limited or give up 1.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Austal Limited vs. Firan Technology Group
Performance |
| Timeline |
| Austal Limited |
| Firan Technology |
Austal and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austal and Firan Technology
The main advantage of trading using opposite Austal and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austal 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.| Austal vs. 808 Renewable Energy | Austal vs. Sky Harbour Group | Austal vs. VirTra Inc | Austal vs. Firan Technology Group |
| Firan Technology vs. 808 Renewable Energy | Firan Technology vs. Austal Limited | Firan Technology vs. Sky Harbour Group | Firan Technology vs. CPI Aerostructures |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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