Correlation Between Firan Technology and TOMBADOR IRON

Can any of the company-specific risk be diversified away by investing in both Firan Technology and TOMBADOR IRON 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 TOMBADOR IRON 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 TOMBADOR IRON LTD, you can compare the effects of market volatilities on Firan Technology and TOMBADOR IRON 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 TOMBADOR IRON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and TOMBADOR IRON.

Diversification Opportunities for Firan Technology and TOMBADOR IRON

0.0

Correlation Coefficient

Firan Technology  TOMBADOR IRON

Pay attention - limited upside

The 3 months correlation between Firan and TOMBADOR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and TOMBADOR IRON LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOMBADOR IRON LTD 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 TOMBADOR IRON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOMBADOR IRON LTD has no effect on the direction of Firan Technology i.e., Firan Technology and TOMBADOR IRON go up and down completely randomly.

Pair Corralation between Firan Technology and TOMBADOR IRON

Assuming the 90 days trading horizon Firan Technology is expected to generate 7.57 times less return on investment than TOMBADOR IRON. But when comparing it to its historical volatility, Firan Technology Group is 18.84 times less risky than TOMBADOR IRON. It trades about 0.11 of its potential returns per unit of risk. TOMBADOR IRON LTD is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  0.90  in TOMBADOR IRON LTD on October 11, 2024 and sell it today you would earn a total of  9.10  from holding TOMBADOR IRON LTD or generate 1011.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Firan Technology Group  vs.  TOMBADOR IRON LTD

Firan Technology

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Firan Technology Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Firan Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

TOMBADOR IRON LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TOMBADOR IRON LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, TOMBADOR IRON is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Firan Technology and TOMBADOR IRON

The main advantage of trading using opposite Firan Technology and TOMBADOR IRON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, TOMBADOR IRON 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 TOMBADOR IRON will offset losses from the drop in TOMBADOR IRON's long position.

The idea behind Firan Technology Group and TOMBADOR IRON LTD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.