Correlation Between Falcon Energy and Firan Technology
Can any of the company-specific risk be diversified away by investing in both Falcon Energy 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 Falcon Energy and Firan Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Energy Materials and Firan Technology Group, you can compare the effects of market volatilities on Falcon Energy 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 Falcon Energy with a short position of Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Energy and Firan Technology.
Diversification Opportunities for Falcon Energy and Firan Technology
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Falcon and Firan is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Energy Materials and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology and Falcon Energy 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 Falcon Energy Materials 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 Falcon Energy i.e., Falcon Energy and Firan Technology go up and down completely randomly.
Pair Corralation between Falcon Energy and Firan Technology
Assuming the 90 days trading horizon Falcon Energy Materials is expected to generate 2.3 times more return on investment than Firan Technology. However, Falcon Energy is 2.3 times more volatile than Firan Technology Group. It trades about 0.24 of its potential returns per unit of risk. Firan Technology Group is currently generating about 0.09 per unit of risk. If you would invest 67.00 in Falcon Energy Materials on August 30, 2024 and sell it today you would earn a total of 17.00 from holding Falcon Energy Materials or generate 25.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falcon Energy Materials vs. Firan Technology Group
Performance |
| Timeline |
| Falcon Energy Materials |
| Firan Technology |
Falcon Energy and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Energy and Firan Technology
The main advantage of trading using opposite Falcon Energy and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Energy 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.| Falcon Energy vs. Data Communications Management | Falcon Energy vs. Lion One Metals | Falcon Energy vs. DIRTT Environmental Solutions | Falcon Energy vs. Arbor Metals 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |