Correlation Between Safran SA and Firan Technology
Can any of the company-specific risk be diversified away by investing in both Safran SA 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 Safran SA and Firan Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safran SA and Firan Technology Group, you can compare the effects of market volatilities on Safran SA 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 Safran SA with a short position of Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safran SA and Firan Technology.
Diversification Opportunities for Safran SA and Firan Technology
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Safran and Firan is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Safran SA and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology and Safran SA 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 Safran SA 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 Safran SA i.e., Safran SA and Firan Technology go up and down completely randomly.
Pair Corralation between Safran SA and Firan Technology
Assuming the 90 days horizon Safran SA is expected to generate 1.4 times less return on investment than Firan Technology. In addition to that, Safran SA is 1.04 times more volatile than Firan Technology Group. It trades about 0.07 of its total potential returns per unit of risk. Firan Technology Group is currently generating about 0.09 per unit of volatility. If you would invest 515.00 in Firan Technology Group on September 3, 2024 and sell it today you would earn a total of 14.00 from holding Firan Technology Group or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safran SA vs. Firan Technology Group
Performance |
| Timeline |
| Safran SA |
| Firan Technology |
Safran SA and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safran SA and Firan Technology
The main advantage of trading using opposite Safran SA and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safran SA 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.| Safran SA vs. Airbus Group NV | Safran SA vs. Moog Inc | Safran SA vs. BAE Systems PLC | Safran SA vs. Airbus Group SE |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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