Correlation Between Firan Technology and Surge Components

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

Diversification Opportunities for Firan Technology and Surge Components

-0.34

Correlation Coefficient

Firan Technology  Surge Components

Very good diversification

The 3 months correlation between Firan and Surge is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and Surge Components in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge Components 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 Surge Components. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Components has no effect on the direction of Firan Technology i.e., Firan Technology and Surge Components go up and down completely randomly.

Pair Corralation between Firan Technology and Surge Components

Assuming the 90 days horizon Firan Technology is expected to generate 2.17 times less return on investment than Surge Components. In addition to that, Firan Technology is 1.54 times more volatile than Surge Components. It trades about 0.02 of its total potential returns per unit of risk. Surge Components is currently generating about 0.05 per unit of volatility. If you would invest  230.00  in Surge Components on December 28, 2024 and sell it today you would earn a total of  10.00  from holding Surge Components or generate 4.35% 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.  Surge Components

Firan Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Firan Technology Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Firan Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Surge Components

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Surge Components are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Surge Components is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Firan Technology and Surge Components

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

The idea behind Firan Technology Group and Surge Components 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.