Correlation Between Kingsmen Resources and Firan Technology
Can any of the company-specific risk be diversified away by investing in both Kingsmen Resources and Firan Technology 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 Kingsmen Resources and Firan Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingsmen Resources and Firan Technology Group, you can compare the effects of market volatilities on Kingsmen Resources and Firan Technology 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 Kingsmen Resources with a short position of Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingsmen Resources and Firan Technology.
Diversification Opportunities for Kingsmen Resources and Firan Technology
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kingsmen and Firan is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Kingsmen Resources and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology and Kingsmen Resources 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 Kingsmen Resources are associated (or correlated) with Firan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firan Technology has no effect on the direction of Kingsmen Resources i.e., Kingsmen Resources and Firan Technology go up and down completely randomly.
Pair Corralation between Kingsmen Resources and Firan Technology
Assuming the 90 days horizon Kingsmen Resources is expected to generate 4.49 times more return on investment than Firan Technology. However, Kingsmen Resources is 4.49 times more volatile than Firan Technology Group. It trades about 0.09 of its potential returns per unit of risk. Firan Technology Group is currently generating about 0.1 per unit of risk. If you would invest 40.00 in Kingsmen Resources on August 30, 2024 and sell it today you would earn a total of 4.00 from holding Kingsmen Resources or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingsmen Resources vs. Firan Technology Group
Performance |
| Timeline |
| Kingsmen Resources |
| Firan Technology |
Kingsmen Resources and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingsmen Resources and Firan Technology
The main advantage of trading using opposite Kingsmen Resources and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingsmen Resources position performs unexpectedly, Firan Technology 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 Firan Technology will offset losses from the drop in Firan Technology's long position.| Kingsmen Resources vs. First Majestic Silver | Kingsmen Resources vs. Ivanhoe Energy | Kingsmen Resources vs. Orezone Gold Corp | Kingsmen Resources vs. Faraday Copper Corp |
| Firan Technology vs. Cielo Waste Solutions | Firan Technology vs. Forstrong Global Income | Firan Technology vs. Terreno Resources Corp | Firan Technology vs. iShares Canadian HYBrid |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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