Correlation Between Firan Technology and Laurentian Bank
Can any of the company-specific risk be diversified away by investing in both Firan Technology and Laurentian Bank 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 Laurentian Bank 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 Laurentian Bank, you can compare the effects of market volatilities on Firan Technology and Laurentian Bank 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 Laurentian Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and Laurentian Bank.
Diversification Opportunities for Firan Technology and Laurentian Bank
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Firan and Laurentian is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and Laurentian Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laurentian Bank 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 Laurentian Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laurentian Bank has no effect on the direction of Firan Technology i.e., Firan Technology and Laurentian Bank go up and down completely randomly.
Pair Corralation between Firan Technology and Laurentian Bank
Assuming the 90 days trading horizon Firan Technology Group is expected to generate 1.17 times more return on investment than Laurentian Bank. However, Firan Technology is 1.17 times more volatile than Laurentian Bank. It trades about 0.13 of its potential returns per unit of risk. Laurentian Bank is currently generating about 0.01 per unit of risk. If you would invest 195.00 in Firan Technology Group on August 30, 2024 and sell it today you would earn a total of 531.00 from holding Firan Technology Group or generate 272.31% 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. Laurentian Bank
Performance |
| Timeline |
| Firan Technology |
| Laurentian Bank |
Firan Technology and Laurentian Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firan Technology and Laurentian Bank
The main advantage of trading using opposite Firan Technology and Laurentian Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, Laurentian Bank 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 Laurentian Bank will offset losses from the drop in Laurentian Bank's long position.| Firan Technology vs. Hammond Power Solutions | Firan Technology vs. Questor Technology | Firan Technology vs. Vecima Networks | Firan Technology vs. Magellan Aerospace |
| Laurentian Bank vs. Canadian Western Bank | Laurentian Bank vs. National Bank of | Laurentian Bank vs. Canadian Imperial Bank | Laurentian Bank vs. Great West Lifeco |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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