Correlation Between ASPEN TECHINC and Firan Technology
Can any of the company-specific risk be diversified away by investing in both ASPEN TECHINC 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 ASPEN TECHINC and Firan Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASPEN TECHINC DL and Firan Technology Group, you can compare the effects of market volatilities on ASPEN TECHINC 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 ASPEN TECHINC with a short position of Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASPEN TECHINC and Firan Technology.
Diversification Opportunities for ASPEN TECHINC and Firan Technology
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ASPEN and Firan is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding ASPEN TECHINC DL and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology and ASPEN TECHINC 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 ASPEN TECHINC DL 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 ASPEN TECHINC i.e., ASPEN TECHINC and Firan Technology go up and down completely randomly.
Pair Corralation between ASPEN TECHINC and Firan Technology
Assuming the 90 days horizon ASPEN TECHINC is expected to generate 2.88 times less return on investment than Firan Technology. But when comparing it to its historical volatility, ASPEN TECHINC DL is 1.05 times less risky than Firan Technology. It trades about 0.04 of its potential returns per unit of risk. Firan Technology Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 154.00 in Firan Technology Group on October 16, 2024 and sell it today you would earn a total of 324.00 from holding Firan Technology Group or generate 210.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
ASPEN TECHINC DL vs. Firan Technology Group
Performance |
| Timeline |
| ASPEN TECHINC DL |
| Firan Technology |
ASPEN TECHINC and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASPEN TECHINC and Firan Technology
The main advantage of trading using opposite ASPEN TECHINC and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASPEN TECHINC 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.| ASPEN TECHINC vs. FIH MOBILE | ASPEN TECHINC vs. Vishay Intertechnology | ASPEN TECHINC vs. SCOTT TECHNOLOGY | ASPEN TECHINC vs. Align Technology |
| Firan Technology vs. MAGNUM MINING EXP | Firan Technology vs. GRIFFIN MINING LTD | Firan Technology vs. BioNTech SE | Firan Technology vs. ASPEN TECHINC DL |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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