Correlation Between BCE and Firan Technology

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Can any of the company-specific risk be diversified away by investing in both BCE 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 BCE and Firan Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCE Inc and Firan Technology Group, you can compare the effects of market volatilities on BCE 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 BCE with a short position of Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCE and Firan Technology.

Diversification Opportunities for BCE and Firan Technology

-0.74
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between BCE and Firan is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology and BCE 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 BCE Inc 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 BCE i.e., BCE and Firan Technology go up and down completely randomly.

Pair Corralation between BCE and Firan Technology

Assuming the 90 days trading horizon BCE Inc is expected to under-perform the Firan Technology. In addition to that, BCE is 1.07 times more volatile than Firan Technology Group. It trades about -0.27 of its total potential returns per unit of risk. Firan Technology Group is currently generating about 0.09 per unit of volatility. If you would invest  683.00  in Firan Technology Group on October 21, 2024 and sell it today you would earn a total of  55.00  from holding Firan Technology Group or generate 8.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

BCE Inc  vs.  Firan Technology Group

 Performance 
       Timeline  
BCE Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BCE Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
Firan Technology 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Firan Technology Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Firan Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

BCE and Firan Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BCE and Firan Technology

The main advantage of trading using opposite BCE and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCE 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.
The idea behind BCE Inc and Firan Technology Group 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 Stocks Directory module to find actively traded stocks across global markets.

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