Correlation Between FLYHT Aerospace and Firan Technology

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

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

Diversification Opportunities for FLYHT Aerospace and Firan Technology

0.94

Correlation Coefficient

FLYHT Aerospace  Firan Technology

Almost no diversification

The 3 months correlation between FLYHT and Firan is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding FLYHT Aerospace Solutions and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology and FLYHT Aerospace 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 FLYHT Aerospace Solutions 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 FLYHT Aerospace i.e., FLYHT Aerospace and Firan Technology go up and down completely randomly.

Pair Corralation between FLYHT Aerospace and Firan Technology

Assuming the 90 days horizon FLYHT Aerospace Solutions is expected to generate 3.64 times more return on investment than Firan Technology. However, FLYHT Aerospace is 3.64 times more volatile than Firan Technology Group. It trades about 0.22 of its potential returns per unit of risk. Firan Technology Group is currently generating about 0.23 per unit of risk. If you would invest  15.00  in FLYHT Aerospace Solutions on September 13, 2024 and sell it today you would earn a total of  19.00  from holding FLYHT Aerospace Solutions or generate 126.67% return on investment over 90 days.

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

FLYHT Aerospace Solutions  vs.  Firan Technology Group

FLYHT Aerospace Solutions

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FLYHT Aerospace Solutions are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, FLYHT Aerospace showed solid returns over the last few months and may actually be approaching a breakup point.

Firan Technology

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Firan Technology Group are ranked lower than 17 (%) 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.

Pair Trading with FLYHT Aerospace and Firan Technology

The main advantage of trading using opposite FLYHT Aerospace and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLYHT Aerospace 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 FLYHT Aerospace Solutions 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.