Correlation Between Ocumetics Technology and Firan Technology

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

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

Diversification Opportunities for Ocumetics Technology and Firan Technology

0.14

Correlation Coefficient

Ocumetics Technology  Firan Technology

Average diversification

The 3 months correlation between Ocumetics and Firan is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ocumetics Technology Corp and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology and Ocumetics 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 Ocumetics Technology Corp 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 Ocumetics Technology i.e., Ocumetics Technology and Firan Technology go up and down completely randomly.

Pair Corralation between Ocumetics Technology and Firan Technology

Assuming the 90 days horizon Ocumetics Technology is expected to generate 43.8 times less return on investment than Firan Technology. In addition to that, Ocumetics Technology is 1.86 times more volatile than Firan Technology Group. It trades about 0.0 of its total potential returns per unit of risk. Firan Technology Group is currently generating about 0.23 per unit of volatility. 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 Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ocumetics Technology Corp  vs.  Firan Technology Group

Ocumetics Technology Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ocumetics Technology Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Ocumetics Technology is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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 unfluctuating 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 Ocumetics Technology and Firan Technology

The main advantage of trading using opposite Ocumetics Technology and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocumetics Technology 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 Ocumetics Technology Corp 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.