Correlation Between Firan Technology and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both Firan Technology and Costco Wholesale 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 Costco Wholesale 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 Costco Wholesale Corp, you can compare the effects of market volatilities on Firan Technology and Costco Wholesale 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 Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and Costco Wholesale.
Diversification Opportunities for Firan Technology and Costco Wholesale
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Firan and Costco is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and Costco Wholesale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale Corp 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 Costco Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Costco Wholesale Corp has no effect on the direction of Firan Technology i.e., Firan Technology and Costco Wholesale go up and down completely randomly.
Pair Corralation between Firan Technology and Costco Wholesale
Assuming the 90 days trading horizon Firan Technology Group is expected to generate 1.53 times more return on investment than Costco Wholesale. However, Firan Technology is 1.53 times more volatile than Costco Wholesale Corp. It trades about 0.08 of its potential returns per unit of risk. Costco Wholesale Corp is currently generating about 0.11 per unit of risk. If you would invest 574.00 in Firan Technology Group on September 1, 2024 and sell it today you would earn a total of 156.00 from holding Firan Technology Group or generate 27.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firan Technology Group vs. Costco Wholesale Corp
Performance |
| Timeline |
| Firan Technology |
| Costco Wholesale Corp |
Firan Technology and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firan Technology and Costco Wholesale
The main advantage of trading using opposite Firan Technology and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, Costco Wholesale 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 Costco Wholesale will offset losses from the drop in Costco Wholesale's long position.| Firan Technology vs. Hammond Power Solutions | Firan Technology vs. Questor Technology | Firan Technology vs. Vecima Networks | Firan Technology vs. Magellan Aerospace |
| Costco Wholesale vs. Amazon CDR | Costco Wholesale vs. Berkshire Hathaway CDR | Costco Wholesale vs. UnitedHealth Group CDR | Costco Wholesale vs. Apple Inc CDR |
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.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |