Correlation Between Canadian Utilities and Firan Technology
Can any of the company-specific risk be diversified away by investing in both Canadian Utilities 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 Canadian Utilities and Firan Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Utilities Limited and Firan Technology Group, you can compare the effects of market volatilities on Canadian Utilities 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 Canadian Utilities with a short position of Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Utilities and Firan Technology.
Diversification Opportunities for Canadian Utilities and Firan Technology
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canadian and Firan is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities 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 Canadian Utilities 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 Canadian Utilities 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 Canadian Utilities i.e., Canadian Utilities and Firan Technology go up and down completely randomly.
Pair Corralation between Canadian Utilities and Firan Technology
Assuming the 90 days horizon Canadian Utilities is expected to generate 4.32 times less return on investment than Firan Technology. But when comparing it to its historical volatility, Canadian Utilities Limited is 2.01 times less risky than Firan Technology. It trades about 0.05 of its potential returns per unit of risk. Firan Technology Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 298.00 in Firan Technology Group on November 3, 2024 and sell it today you would earn a total of 232.00 from holding Firan Technology Group or generate 77.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Canadian Utilities Limited vs. Firan Technology Group
Performance |
| Timeline |
| Canadian Utilities |
| Firan Technology |
Canadian Utilities and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Utilities and Firan Technology
The main advantage of trading using opposite Canadian Utilities and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities 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.| Canadian Utilities vs. SEKISUI CHEMICAL | Canadian Utilities vs. AIR PRODCHEMICALS | Canadian Utilities vs. Silicon Motion Technology | Canadian Utilities vs. TRI CHEMICAL LABORATINC |
| Firan Technology vs. Infrastrutture Wireless Italiane | Firan Technology vs. Focus Home Interactive | Firan Technology vs. American Homes 4 | Firan Technology vs. HAVERTY FURNITURE A |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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