Correlation Between Firan Technology and Sage Potash
Can any of the company-specific risk be diversified away by investing in both Firan Technology and Sage Potash 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 Sage Potash 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 Sage Potash Corp, you can compare the effects of market volatilities on Firan Technology and Sage Potash 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 Sage Potash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and Sage Potash.
Diversification Opportunities for Firan Technology and Sage Potash
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Firan and Sage is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and Sage Potash Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sage Potash Corp 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 Sage Potash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sage Potash Corp has no effect on the direction of Firan Technology i.e., Firan Technology and Sage Potash go up and down completely randomly.
Pair Corralation between Firan Technology and Sage Potash
Assuming the 90 days trading horizon Firan Technology Group is expected to generate 0.29 times more return on investment than Sage Potash. However, Firan Technology Group is 3.42 times less risky than Sage Potash. It trades about 0.23 of its potential returns per unit of risk. Sage Potash Corp is currently generating about -0.02 per unit of risk. If you would invest 581.00 in Firan Technology Group on September 15, 2024 and sell it today you would earn a total of 173.00 from holding Firan Technology Group or generate 29.78% 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. Sage Potash Corp
Performance |
Timeline |
Firan Technology |
Sage Potash Corp |
Firan Technology and Sage Potash Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Firan Technology and Sage Potash
The main advantage of trading using opposite Firan Technology and Sage Potash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, Sage Potash 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 Sage Potash will offset losses from the drop in Sage Potash's long position.Firan Technology vs. Baylin Technologies | ||
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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