Correlation Between Firan Technology and Electro Optic
Can any of the company-specific risk be diversified away by investing in both Firan Technology and Electro Optic 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 Electro Optic 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 Electro Optic Systems, you can compare the effects of market volatilities on Firan Technology and Electro Optic 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 Electro Optic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and Electro Optic.
Diversification Opportunities for Firan Technology and Electro Optic
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Firan and Electro is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and Electro Optic Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electro Optic Systems 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 Electro Optic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electro Optic Systems has no effect on the direction of Firan Technology i.e., Firan Technology and Electro Optic go up and down completely randomly.
Pair Corralation between Firan Technology and Electro Optic
Assuming the 90 days horizon Firan Technology Group is expected to generate 0.65 times more return on investment than Electro Optic. However, Firan Technology Group is 1.54 times less risky than Electro Optic. It trades about 0.1 of its potential returns per unit of risk. Electro Optic Systems is currently generating about 0.06 per unit of risk. If you would invest 142.00 in Firan Technology Group on September 2, 2024 and sell it today you would earn a total of 387.00 from holding Firan Technology Group or generate 272.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firan Technology Group vs. Electro Optic Systems
Performance |
| Timeline |
| Firan Technology |
| Electro Optic Systems |
Firan Technology and Electro Optic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firan Technology and Electro Optic
The main advantage of trading using opposite Firan Technology and Electro Optic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, Electro Optic 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 Electro Optic will offset losses from the drop in Electro Optic's long position.| Firan Technology vs. BCE Inc | Firan Technology vs. Axiologix | Firan Technology vs. Advanced Info Service | Firan Technology vs. HUMANA INC |
| Electro Optic vs. Firan Technology Group | Electro Optic vs. 808 Renewable Energy | Electro Optic vs. Park Electrochemical | Electro Optic vs. Innovative Solutions and |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |