Correlation Between Firan Technology and Canaf Investments
Can any of the company-specific risk be diversified away by investing in both Firan Technology and Canaf Investments 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 Firan Technology and Canaf Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firan Technology Group and Canaf Investments, you can compare the effects of market volatilities on Firan Technology and Canaf Investments 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 Firan Technology with a short position of Canaf Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and Canaf Investments.
Diversification Opportunities for Firan Technology and Canaf Investments
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Firan and Canaf is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and Canaf Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaf Investments and Firan Technology 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 Firan Technology Group are associated (or correlated) with Canaf Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaf Investments has no effect on the direction of Firan Technology i.e., Firan Technology and Canaf Investments go up and down completely randomly.
Pair Corralation between Firan Technology and Canaf Investments
Assuming the 90 days trading horizon Firan Technology Group is expected to generate 0.53 times more return on investment than Canaf Investments. However, Firan Technology Group is 1.9 times less risky than Canaf Investments. It trades about 0.06 of its potential returns per unit of risk. Canaf Investments is currently generating about -0.14 per unit of risk. If you would invest 740.00 in Firan Technology Group on September 12, 2024 and sell it today you would earn a total of 15.00 from holding Firan Technology Group or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firan Technology Group vs. Canaf Investments
Performance |
| Timeline |
| Firan Technology |
| Canaf Investments |
Firan Technology and Canaf Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firan Technology and Canaf Investments
The main advantage of trading using opposite Firan Technology and Canaf Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, Canaf Investments 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 Canaf Investments will offset losses from the drop in Canaf Investments' long position.| Firan Technology vs. Hammond Power Solutions | Firan Technology vs. Questor Technology | Firan Technology vs. Vecima Networks | Firan Technology vs. Magellan Aerospace |
| Canaf Investments vs. Ressources Minieres Radisson | Canaf Investments vs. Galantas Gold Corp | Canaf Investments vs. Red Pine Exploration | Canaf Investments vs. Kore Mining |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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