Correlation Between Firan Technology and Tel Instrument
Can any of the company-specific risk be diversified away by investing in both Firan Technology and Tel Instrument 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 Tel Instrument 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 Tel Instrument Electronics Corp, you can compare the effects of market volatilities on Firan Technology and Tel Instrument 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 Tel Instrument. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and Tel Instrument.
Diversification Opportunities for Firan Technology and Tel Instrument
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Firan and Tel is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and Tel Instrument Electronics Cor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tel Instrument Elect 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 Tel Instrument. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tel Instrument Elect has no effect on the direction of Firan Technology i.e., Firan Technology and Tel Instrument go up and down completely randomly.
Pair Corralation between Firan Technology and Tel Instrument
Assuming the 90 days horizon Firan Technology Group is expected to generate 0.98 times more return on investment than Tel Instrument. However, Firan Technology Group is 1.02 times less risky than Tel Instrument. It trades about 0.1 of its potential returns per unit of risk. Tel Instrument Electronics Corp is currently generating about 0.02 per unit of risk. If you would invest 137.00 in Firan Technology Group on August 25, 2024 and sell it today you would earn a total of 397.00 from holding Firan Technology Group or generate 289.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.79% |
| Values | Daily Returns |
Firan Technology Group vs. Tel Instrument Electronics Cor
Performance |
| Timeline |
| Firan Technology |
| Tel Instrument Elect |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Firan Technology and Tel Instrument Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firan Technology and Tel Instrument
The main advantage of trading using opposite Firan Technology and Tel Instrument positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, Tel Instrument 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 Tel Instrument will offset losses from the drop in Tel Instrument'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 |
| Tel Instrument vs. 808 Renewable Energy | Tel Instrument vs. Austal Limited | Tel Instrument vs. Sky Harbour Group | Tel Instrument vs. VirTra Inc |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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