Correlation Between Firan Technology and BURLINGTON STORES
Can any of the company-specific risk be diversified away by investing in both Firan Technology and BURLINGTON STORES 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 BURLINGTON STORES 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 BURLINGTON STORES, you can compare the effects of market volatilities on Firan Technology and BURLINGTON STORES 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 BURLINGTON STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and BURLINGTON STORES.
Diversification Opportunities for Firan Technology and BURLINGTON STORES
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Firan and BURLINGTON is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and BURLINGTON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BURLINGTON STORES 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 BURLINGTON STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BURLINGTON STORES has no effect on the direction of Firan Technology i.e., Firan Technology and BURLINGTON STORES go up and down completely randomly.
Pair Corralation between Firan Technology and BURLINGTON STORES
Assuming the 90 days trading horizon Firan Technology is expected to generate 4.46 times less return on investment than BURLINGTON STORES. But when comparing it to its historical volatility, Firan Technology Group is 1.18 times less risky than BURLINGTON STORES. It trades about 0.06 of its potential returns per unit of risk. BURLINGTON STORES is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 23,600 in BURLINGTON STORES on October 7, 2024 and sell it today you would earn a total of 4,200 from holding BURLINGTON STORES or generate 17.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Firan Technology Group vs. BURLINGTON STORES
Performance |
Timeline |
Firan Technology |
BURLINGTON STORES |
Firan Technology and BURLINGTON STORES Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Firan Technology and BURLINGTON STORES
The main advantage of trading using opposite Firan Technology and BURLINGTON STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, BURLINGTON STORES 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 BURLINGTON STORES will offset losses from the drop in BURLINGTON STORES's long position.Firan Technology vs. Apple Inc | Firan Technology vs. Apple Inc | Firan Technology vs. Apple Inc | Firan Technology vs. Apple Inc |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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