Correlation Between Cirmaker Technology and Futuretech

Can any of the company-specific risk be diversified away by investing in both Cirmaker Technology and Futuretech 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 Cirmaker Technology and Futuretech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cirmaker Technology and Futuretech II Acquisition, you can compare the effects of market volatilities on Cirmaker Technology and Futuretech 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 Cirmaker Technology with a short position of Futuretech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cirmaker Technology and Futuretech.

Diversification Opportunities for Cirmaker Technology and Futuretech

0.3

Correlation Coefficient

Cirmaker Technology  Futuretech

Weak diversification

The 3 months correlation between Cirmaker and Futuretech is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cirmaker Technology and Futuretech II Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futuretech II Acquisition and Cirmaker 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 Cirmaker Technology are associated (or correlated) with Futuretech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futuretech II Acquisition has no effect on the direction of Cirmaker Technology i.e., Cirmaker Technology and Futuretech go up and down completely randomly.

Pair Corralation between Cirmaker Technology and Futuretech

Given the investment horizon of 90 days Cirmaker Technology is expected to generate 1.54 times more return on investment than Futuretech. However, Cirmaker Technology is 1.54 times more volatile than Futuretech II Acquisition. It trades about 0.22 of its potential returns per unit of risk. Futuretech II Acquisition is currently generating about 0.13 per unit of risk. If you would invest  4.50  in Cirmaker Technology on October 10, 2024 and sell it today you would earn a total of  0.90  from holding Cirmaker Technology or generate 20.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Cirmaker Technology  vs.  Futuretech II Acquisition

Cirmaker Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cirmaker Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, Cirmaker Technology is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Futuretech II Acquisition

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Futuretech II Acquisition are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady forward indicators, Futuretech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Cirmaker Technology and Futuretech

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

The idea behind Cirmaker Technology and Futuretech II Acquisition 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.