Correlation Between Norden Crown and Firan Technology

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

By analyzing existing cross correlation between Norden Crown Metals and Firan Technology Group, you can compare the effects of market volatilities on Norden Crown and Firan Technology 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 Norden Crown with a short position of Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norden Crown and Firan Technology.

Diversification Opportunities for Norden Crown and Firan Technology

0.23

Correlation Coefficient

Norden Crown  Firan Technology

Modest diversification

The 3 months correlation between Norden and Firan is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Norden Crown Metals and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology and Norden Crown 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 Norden Crown Metals are associated (or correlated) with Firan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firan Technology has no effect on the direction of Norden Crown i.e., Norden Crown and Firan Technology go up and down completely randomly.

Pair Corralation between Norden Crown and Firan Technology

Assuming the 90 days trading horizon Norden Crown Metals is expected to generate 7.76 times more return on investment than Firan Technology. However, Norden Crown is 7.76 times more volatile than Firan Technology Group. It trades about 0.06 of its potential returns per unit of risk. Firan Technology Group is currently generating about 0.12 per unit of risk. If you would invest  20.00  in Norden Crown Metals on October 11, 2024 and sell it today you would lose (14.50) from holding Norden Crown Metals or give up 72.5% of portfolio value over 90 days.

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

Norden Crown Metals  vs.  Firan Technology Group

Norden Crown Metals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Norden Crown Metals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating fundamental indicators, Norden Crown showed solid returns over the last few months and may actually be approaching a breakup point.

Firan Technology

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Firan Technology Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Firan Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Norden Crown and Firan Technology

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

The idea behind Norden Crown Metals and Firan Technology Group 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.