Correlation Between Firan Technology and FORTEC ELEKTRONIK

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

Diversification Opportunities for Firan Technology and FORTEC ELEKTRONIK

0.12

Correlation Coefficient

Firan Technology  FORTEC ELEKTRONIK

Average diversification

The 3 months correlation between Firan and FORTEC is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and FORTEC ELEKTRONIK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORTEC ELEKTRONIK 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 FORTEC ELEKTRONIK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORTEC ELEKTRONIK has no effect on the direction of Firan Technology i.e., Firan Technology and FORTEC ELEKTRONIK go up and down completely randomly.

Pair Corralation between Firan Technology and FORTEC ELEKTRONIK

Assuming the 90 days trading horizon Firan Technology Group is expected to under-perform the FORTEC ELEKTRONIK. But the stock apears to be less risky and, when comparing its historical volatility, Firan Technology Group is 1.4 times less risky than FORTEC ELEKTRONIK. The stock trades about -0.07 of its potential returns per unit of risk. The FORTEC ELEKTRONIK is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  1,761  in FORTEC ELEKTRONIK on December 22, 2024 and sell it today you would lose (181.00) from holding FORTEC ELEKTRONIK or give up 10.28% of portfolio value over 90 days.

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

Firan Technology Group  vs.  FORTEC ELEKTRONIK

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 weak 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.

FORTEC ELEKTRONIK

Risk-Adjusted Performance

Very Weak

Over the last 90 days FORTEC ELEKTRONIK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile 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.

Pair Trading with Firan Technology and FORTEC ELEKTRONIK

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

The idea behind Firan Technology Group and FORTEC ELEKTRONIK 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.