Correlation Between Canaf Investments and Firan Technology
Can any of the company-specific risk be diversified away by investing in both Canaf Investments 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 Canaf Investments and Firan Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canaf Investments and Firan Technology Group, you can compare the effects of market volatilities on Canaf Investments 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 Canaf Investments with a short position of Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaf Investments and Firan Technology.
Diversification Opportunities for Canaf Investments and Firan Technology
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canaf and Firan is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Canaf Investments and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology and Canaf Investments 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 Canaf Investments 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 Canaf Investments i.e., Canaf Investments and Firan Technology go up and down completely randomly.
Pair Corralation between Canaf Investments and Firan Technology
Assuming the 90 days horizon Canaf Investments is expected to generate 1.71 times less return on investment than Firan Technology. In addition to that, Canaf Investments is 2.27 times more volatile than Firan Technology Group. It trades about 0.04 of its total potential returns per unit of risk. Firan Technology Group is currently generating about 0.16 per unit of volatility. If you would invest 683.00 in Firan Technology Group on September 13, 2024 and sell it today you would earn a total of 75.00 from holding Firan Technology Group or generate 10.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Canaf Investments vs. Firan Technology Group
Performance |
| Timeline |
| Canaf Investments |
| Firan Technology |
Canaf Investments and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canaf Investments and Firan Technology
The main advantage of trading using opposite Canaf Investments and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaf Investments 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.| Canaf Investments vs. First Majestic Silver | Canaf Investments vs. Ivanhoe Energy | Canaf Investments vs. Orezone Gold Corp | Canaf Investments vs. Faraday Copper Corp |
| Firan Technology vs. Hammond Power Solutions | Firan Technology vs. Questor Technology | Firan Technology vs. Vecima Networks | Firan Technology vs. Magellan Aerospace |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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