Correlation Between Firan Technology and TMX Group
Can any of the company-specific risk be diversified away by investing in both Firan Technology and TMX Group 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 TMX Group 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 TMX Group Limited, you can compare the effects of market volatilities on Firan Technology and TMX Group 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 TMX Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and TMX Group.
Diversification Opportunities for Firan Technology and TMX Group
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Firan and TMX is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and TMX Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMX Group Limited 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 TMX Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMX Group Limited has no effect on the direction of Firan Technology i.e., Firan Technology and TMX Group go up and down completely randomly.
Pair Corralation between Firan Technology and TMX Group
Assuming the 90 days trading horizon Firan Technology Group is expected to generate 2.5 times more return on investment than TMX Group. However, Firan Technology is 2.5 times more volatile than TMX Group Limited. It trades about 0.26 of its potential returns per unit of risk. TMX Group Limited is currently generating about 0.19 per unit of risk. If you would invest 596.00 in Firan Technology Group on September 5, 2024 and sell it today you would earn a total of 153.00 from holding Firan Technology Group or generate 25.67% 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. TMX Group Limited
Performance |
| Timeline |
| Firan Technology |
| TMX Group Limited |
Firan Technology and TMX Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firan Technology and TMX Group
The main advantage of trading using opposite Firan Technology and TMX Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, TMX Group 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 TMX Group will offset losses from the drop in TMX Group's long position.| Firan Technology vs. Hammond Power Solutions | Firan Technology vs. Questor Technology | Firan Technology vs. Vecima Networks | Firan Technology vs. Magellan Aerospace |
| TMX Group vs. Firan Technology Group | TMX Group vs. American Hotel Income | TMX Group vs. CVW CleanTech | TMX Group vs. Canlan Ice Sports |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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