Correlation Between Firan Technology and National Presto
Can any of the company-specific risk be diversified away by investing in both Firan Technology and National Presto 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 National Presto 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 National Presto Industries, you can compare the effects of market volatilities on Firan Technology and National Presto 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 National Presto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and National Presto.
Diversification Opportunities for Firan Technology and National Presto
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Firan and National is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and National Presto Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Presto Indu 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 National Presto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Presto Indu has no effect on the direction of Firan Technology i.e., Firan Technology and National Presto go up and down completely randomly.
Pair Corralation between Firan Technology and National Presto
Assuming the 90 days horizon Firan Technology Group is expected to generate 1.93 times more return on investment than National Presto. However, Firan Technology is 1.93 times more volatile than National Presto Industries. It trades about 0.08 of its potential returns per unit of risk. National Presto Industries is currently generating about 0.01 per unit of risk. If you would invest 293.00 in Firan Technology Group on August 26, 2024 and sell it today you would earn a total of 241.00 from holding Firan Technology Group or generate 82.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firan Technology Group vs. National Presto Industries
Performance |
| Timeline |
| Firan Technology |
| National Presto Indu |
Firan Technology and National Presto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firan Technology and National Presto
The main advantage of trading using opposite Firan Technology and National Presto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, National Presto 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 National Presto will offset losses from the drop in National Presto's long position.| Firan Technology vs. 808 Renewable Energy | Firan Technology vs. Austal Limited | Firan Technology vs. Sky Harbour Group | Firan Technology vs. CPI Aerostructures |
| National Presto vs. Park Electrochemical | National Presto vs. Ducommun Incorporated | National Presto vs. Innovative Solutions and | National Presto vs. VSE Corporation |
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 CEOs Directory module to screen CEOs from public companies around the world.
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