Correlation Between Firan Technology and AGF Management

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

Diversification Opportunities for Firan Technology and AGF Management

0.35

Correlation Coefficient

Firan Technology  AGF Management

Weak diversification

The 3 months correlation between Firan and AGF is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management 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 AGF Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGF Management has no effect on the direction of Firan Technology i.e., Firan Technology and AGF Management go up and down completely randomly.

Pair Corralation between Firan Technology and AGF Management

Assuming the 90 days trading horizon Firan Technology is expected to generate 1.4 times less return on investment than AGF Management. In addition to that, Firan Technology is 1.25 times more volatile than AGF Management Limited. It trades about 0.04 of its total potential returns per unit of risk. AGF Management Limited is currently generating about 0.07 per unit of volatility. If you would invest  1,120  in AGF Management Limited on November 29, 2024 and sell it today you would earn a total of  62.00  from holding AGF Management Limited or generate 5.54% return on investment over 90 days.

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

Firan Technology Group  vs.  AGF Management Limited

Firan Technology

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Firan Technology Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Firan Technology is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

AGF Management

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AGF Management Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, AGF Management may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Firan Technology and AGF Management

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

The idea behind Firan Technology Group and AGF Management Limited 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.