Correlation Between Supremex and Firan Technology

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

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

Diversification Opportunities for Supremex and Firan Technology

-0.47

Correlation Coefficient

Supremex  Firan Technology

Very good diversification

The 3 months correlation between Supremex and Firan is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Supremex and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology and Supremex 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 Supremex 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 Supremex i.e., Supremex and Firan Technology go up and down completely randomly.

Pair Corralation between Supremex and Firan Technology

Assuming the 90 days trading horizon Supremex is expected to generate 1.32 times more return on investment than Firan Technology. However, Supremex is 1.32 times more volatile than Firan Technology Group. It trades about 0.08 of its potential returns per unit of risk. Firan Technology Group is currently generating about 0.03 per unit of risk. If you would invest  366.00  in Supremex on December 30, 2024 and sell it today you would earn a total of  42.00  from holding Supremex or generate 11.48% return on investment over 90 days.

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

Supremex  vs.  Firan Technology Group

Supremex

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Supremex are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Supremex displayed solid returns over the last few months and may actually be approaching a breakup point.

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 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.

Pair Trading with Supremex and Firan Technology

The main advantage of trading using opposite Supremex and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supremex 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 Supremex 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.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.