Correlation Between Firan Technology and Thermal Energy
Can any of the company-specific risk be diversified away by investing in both Firan Technology and Thermal Energy 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 Thermal Energy 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 Thermal Energy International, you can compare the effects of market volatilities on Firan Technology and Thermal Energy 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 Thermal Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and Thermal Energy.
Diversification Opportunities for Firan Technology and Thermal Energy
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Firan and Thermal is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and Thermal Energy International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermal Energy Inter 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 Thermal Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermal Energy Inter has no effect on the direction of Firan Technology i.e., Firan Technology and Thermal Energy go up and down completely randomly.
Pair Corralation between Firan Technology and Thermal Energy
Assuming the 90 days trading horizon Firan Technology Group is expected to generate 0.42 times more return on investment than Thermal Energy. However, Firan Technology Group is 2.36 times less risky than Thermal Energy. It trades about 0.16 of its potential returns per unit of risk. Thermal Energy International is currently generating about -0.02 per unit of risk. If you would invest 525.00 in Firan Technology Group on September 3, 2024 and sell it today you would earn a total of 200.00 from holding Firan Technology Group or generate 38.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firan Technology Group vs. Thermal Energy International
Performance |
| Timeline |
| Firan Technology |
| Thermal Energy Inter |
Firan Technology and Thermal Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firan Technology and Thermal Energy
The main advantage of trading using opposite Firan Technology and Thermal Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, Thermal Energy 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 Thermal Energy will offset losses from the drop in Thermal Energy's long position.| Firan Technology vs. Hammond Power Solutions | Firan Technology vs. Questor Technology | Firan Technology vs. Vecima Networks | Firan Technology vs. Magellan Aerospace |
| Thermal Energy vs. Environmental Waste International | Thermal Energy vs. Aurora Solar Technologies | Thermal Energy vs. Eguana Technologies | Thermal Energy vs. BioRem Inc |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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