Correlation Between Firan Technology and AXA SA

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

Diversification Opportunities for Firan Technology and AXA SA

-0.09

Correlation Coefficient

Firan Technology  AXA SA

Good diversification

The 3 months correlation between Firan and AXA is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA 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 AXA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA SA has no effect on the direction of Firan Technology i.e., Firan Technology and AXA SA go up and down completely randomly.

Pair Corralation between Firan Technology and AXA SA

Assuming the 90 days trading horizon Firan Technology Group is expected to under-perform the AXA SA. In addition to that, Firan Technology is 1.99 times more volatile than AXA SA. It trades about -0.08 of its total potential returns per unit of risk. AXA SA is currently generating about 0.27 per unit of volatility. If you would invest  3,386  in AXA SA on December 20, 2024 and sell it today you would earn a total of  600.00  from holding AXA SA or generate 17.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Firan Technology Group  vs.  AXA SA

Firan Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Firan Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

AXA SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AXA SA are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AXA SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Firan Technology and AXA SA

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

The idea behind Firan Technology Group and AXA SA 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.