Correlation Between Firan Technology and Maple Leaf
Can any of the company-specific risk be diversified away by investing in both Firan Technology and Maple Leaf 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 Maple Leaf 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 Maple Leaf Foods, you can compare the effects of market volatilities on Firan Technology and Maple Leaf 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 Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and Maple Leaf.
Diversification Opportunities for Firan Technology and Maple Leaf
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Firan and Maple is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and Maple Leaf Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Leaf Foods 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 Maple Leaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Leaf Foods has no effect on the direction of Firan Technology i.e., Firan Technology and Maple Leaf go up and down completely randomly.
Pair Corralation between Firan Technology and Maple Leaf
Assuming the 90 days trading horizon Firan Technology is expected to generate 1.13 times less return on investment than Maple Leaf. In addition to that, Firan Technology is 1.0 times more volatile than Maple Leaf Foods. It trades about 0.19 of its total potential returns per unit of risk. Maple Leaf Foods is currently generating about 0.21 per unit of volatility. If you would invest 2,146 in Maple Leaf Foods on August 27, 2024 and sell it today you would earn a total of 188.00 from holding Maple Leaf Foods or generate 8.76% 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. Maple Leaf Foods
Performance |
| Timeline |
| Firan Technology |
| Maple Leaf Foods |
Firan Technology and Maple Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firan Technology and Maple Leaf
The main advantage of trading using opposite Firan Technology and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, Maple Leaf 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 Maple Leaf will offset losses from the drop in Maple Leaf's long position.| Firan Technology vs. Hammond Power Solutions | Firan Technology vs. Questor Technology | Firan Technology vs. Vecima Networks | Firan Technology vs. Heroux Devtek |
| Maple Leaf vs. Saputo Inc | Maple Leaf vs. George Weston Limited | Maple Leaf vs. Empire Company Limited | Maple Leaf vs. Premium Brands Holdings |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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