Correlation Between Firan Technology and Coda Octopus
Can any of the company-specific risk be diversified away by investing in both Firan Technology and Coda Octopus 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 Coda Octopus 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 Coda Octopus Group, you can compare the effects of market volatilities on Firan Technology and Coda Octopus 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 Coda Octopus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and Coda Octopus.
Diversification Opportunities for Firan Technology and Coda Octopus
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Firan and Coda is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and Coda Octopus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coda Octopus Group 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 Coda Octopus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coda Octopus Group has no effect on the direction of Firan Technology i.e., Firan Technology and Coda Octopus go up and down completely randomly.
Pair Corralation between Firan Technology and Coda Octopus
Assuming the 90 days horizon Firan Technology Group is expected to generate 0.59 times more return on investment than Coda Octopus. However, Firan Technology Group is 1.71 times less risky than Coda Octopus. It trades about 0.12 of its potential returns per unit of risk. Coda Octopus Group is currently generating about 0.02 per unit of risk. If you would invest 498.00 in Firan Technology Group on August 29, 2024 and sell it today you would earn a total of 22.00 from holding Firan Technology Group or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firan Technology Group vs. Coda Octopus Group
Performance |
| Timeline |
| Firan Technology |
| Coda Octopus Group |
Firan Technology and Coda Octopus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firan Technology and Coda Octopus
The main advantage of trading using opposite Firan Technology and Coda Octopus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, Coda Octopus 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 Coda Octopus will offset losses from the drop in Coda Octopus' long position.| Firan Technology vs. HeartCore Enterprises | Firan Technology vs. Trust Stamp | Firan Technology vs. Quhuo | Firan Technology vs. C3 Ai Inc |
| Coda Octopus vs. Ducommun Incorporated | Coda Octopus vs. Park Electrochemical | Coda Octopus vs. National Presto Industries | Coda Octopus vs. Astronics |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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