Correlation Between Firan Technology and AIR CHINA

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

Diversification Opportunities for Firan Technology and AIR CHINA

0.63

Correlation Coefficient

Firan Technology  AIR CHINA

Poor diversification

The 3 months correlation between Firan and AIR is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and AIR CHINA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR CHINA LTD 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 AIR CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR CHINA LTD has no effect on the direction of Firan Technology i.e., Firan Technology and AIR CHINA go up and down completely randomly.

Pair Corralation between Firan Technology and AIR CHINA

Assuming the 90 days trading horizon Firan Technology Group is expected to generate 1.17 times more return on investment than AIR CHINA. However, Firan Technology is 1.17 times more volatile than AIR CHINA LTD. It trades about 0.18 of its potential returns per unit of risk. AIR CHINA LTD is currently generating about 0.06 per unit of risk. If you would invest  515.00  in Firan Technology Group on April 20, 2025 and sell it today you would earn a total of  165.00  from holding Firan Technology Group or generate 32.04% return on investment over 90 days.

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

Firan Technology Group  vs.  AIR CHINA LTD

Firan Technology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Firan Technology Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Firan Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

AIR CHINA LTD

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AIR CHINA LTD are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, AIR CHINA may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Firan Technology and AIR CHINA

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

The idea behind Firan Technology Group and AIR CHINA LTD 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.