Correlation Between CCL Industries and Firan Technology
Can any of the company-specific risk be diversified away by investing in both CCL Industries 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 CCL Industries and Firan Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCL Industries and Firan Technology Group, you can compare the effects of market volatilities on CCL Industries 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 CCL Industries with a short position of Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCL Industries and Firan Technology.
Diversification Opportunities for CCL Industries and Firan Technology
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CCL and Firan is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology and CCL Industries 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 CCL Industries 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 CCL Industries i.e., CCL Industries and Firan Technology go up and down completely randomly.
Pair Corralation between CCL Industries and Firan Technology
Assuming the 90 days trading horizon CCL Industries is expected to under-perform the Firan Technology. But the stock apears to be less risky and, when comparing its historical volatility, CCL Industries is 1.45 times less risky than Firan Technology. The stock trades about -0.29 of its potential returns per unit of risk. The Firan Technology Group is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 689.00 in Firan Technology Group on August 28, 2024 and sell it today you would earn a total of 53.00 from holding Firan Technology Group or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CCL Industries vs. Firan Technology Group
Performance |
| Timeline |
| CCL Industries |
| Firan Technology |
CCL Industries and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CCL Industries and Firan Technology
The main advantage of trading using opposite CCL Industries and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCL Industries 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.| CCL Industries vs. Stella Jones | CCL Industries vs. Gildan Activewear | CCL Industries vs. Toromont Industries | CCL Industries vs. Waste Connections |
| Firan Technology vs. Hammond Power Solutions | Firan Technology vs. Questor Technology | Firan Technology vs. Vecima Networks | Firan Technology vs. Heroux Devtek |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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