Correlation Between Firan Technology and International Business

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

Diversification Opportunities for Firan Technology and International Business

-0.09

Correlation Coefficient

Firan Technology  International Business

Good diversification

The 3 months correlation between Firan and International is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business 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 International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Firan Technology i.e., Firan Technology and International Business go up and down completely randomly.

Pair Corralation between Firan Technology and International Business

Assuming the 90 days trading horizon Firan Technology Group is expected to generate 1.7 times more return on investment than International Business. However, Firan Technology is 1.7 times more volatile than International Business Machines. It trades about 0.11 of its potential returns per unit of risk. International Business Machines is currently generating about 0.08 per unit of risk. If you would invest  244.00  in Firan Technology Group on October 3, 2024 and sell it today you would earn a total of  485.00  from holding Firan Technology Group or generate 198.77% return on investment over 90 days.

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

Firan Technology Group  vs.  International Business Machine

Firan Technology

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Firan Technology Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Firan Technology displayed solid returns over the last few months and may actually be approaching a breakup point.

International Business

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Business Machines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, International Business is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Firan Technology and International Business

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

The idea behind Firan Technology Group and International Business Machines 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.