Correlation Between Firan Technology and Singapore Technologies
Can any of the company-specific risk be diversified away by investing in both Firan Technology and Singapore Technologies 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 Singapore Technologies 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 Singapore Technologies Engineering, you can compare the effects of market volatilities on Firan Technology and Singapore Technologies 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 Singapore Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and Singapore Technologies.
Diversification Opportunities for Firan Technology and Singapore Technologies
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Firan and Singapore is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and Singapore Technologies Enginee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Technologies 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 Singapore Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Technologies has no effect on the direction of Firan Technology i.e., Firan Technology and Singapore Technologies go up and down completely randomly.
Pair Corralation between Firan Technology and Singapore Technologies
Assuming the 90 days horizon Firan Technology Group is expected to generate 1.07 times more return on investment than Singapore Technologies. However, Firan Technology is 1.07 times more volatile than Singapore Technologies Engineering. It trades about 0.1 of its potential returns per unit of risk. Singapore Technologies Engineering is currently generating about 0.05 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 Together |
| Strength | Significant |
| Accuracy | 63.1% |
| Values | Daily Returns |
Firan Technology Group vs. Singapore Technologies Enginee
Performance |
| Timeline |
| Firan Technology |
| Singapore Technologies |
Firan Technology and Singapore Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firan Technology and Singapore Technologies
The main advantage of trading using opposite Firan Technology and Singapore Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, Singapore Technologies 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 Singapore Technologies will offset losses from the drop in Singapore Technologies' long position.| Firan Technology vs. BCE Inc | Firan Technology vs. Axiologix | Firan Technology vs. Advanced Info Service | Firan Technology vs. HUMANA INC |
| Singapore Technologies vs. Thales SA | Singapore Technologies vs. MTU Aero Engines | Singapore Technologies vs. Safran SA | Singapore Technologies vs. Airbus Group SE |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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