Correlation Between Firan Technology and Hammond Power
Can any of the company-specific risk be diversified away by investing in both Firan Technology and Hammond Power 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 Hammond Power 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 Hammond Power Solutions, you can compare the effects of market volatilities on Firan Technology and Hammond Power 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 Hammond Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and Hammond Power.
Diversification Opportunities for Firan Technology and Hammond Power
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Firan and Hammond is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and Hammond Power Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammond Power Solutions 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 Hammond Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hammond Power Solutions has no effect on the direction of Firan Technology i.e., Firan Technology and Hammond Power go up and down completely randomly.
Pair Corralation between Firan Technology and Hammond Power
Assuming the 90 days trading horizon Firan Technology Group is expected to generate 0.59 times more return on investment than Hammond Power. However, Firan Technology Group is 1.7 times less risky than Hammond Power. It trades about 0.18 of its potential returns per unit of risk. Hammond Power Solutions is currently generating about 0.01 per unit of risk. 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 |
Firan Technology Group vs. Hammond Power Solutions
Performance |
| Timeline |
| Firan Technology |
| Hammond Power Solutions |
Firan Technology and Hammond Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firan Technology and Hammond Power
The main advantage of trading using opposite Firan Technology and Hammond Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, Hammond Power 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 Hammond Power will offset losses from the drop in Hammond Power's long position.| Firan Technology vs. Hammond Power Solutions | Firan Technology vs. Questor Technology | Firan Technology vs. Vecima Networks | Firan Technology vs. Magellan Aerospace |
| Hammond Power vs. Hammond Manufacturing | Hammond Power vs. Firan Technology Group | Hammond Power vs. Supremex | Hammond Power vs. Geodrill Limited |
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 Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Stocks Directory Find actively traded stocks across global markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |