Correlation Between Bogota Financial and Franklin Financial
Can any of the company-specific risk be diversified away by investing in both Bogota Financial and Franklin Financial 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 Bogota Financial and Franklin Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bogota Financial Corp and Franklin Financial Services, you can compare the effects of market volatilities on Bogota Financial and Franklin Financial 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 Bogota Financial with a short position of Franklin Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bogota Financial and Franklin Financial.
Diversification Opportunities for Bogota Financial and Franklin Financial
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bogota and Franklin is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bogota Financial Corp and Franklin Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Financial and Bogota Financial 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 Bogota Financial Corp are associated (or correlated) with Franklin Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Financial has no effect on the direction of Bogota Financial i.e., Bogota Financial and Franklin Financial go up and down completely randomly.
Pair Corralation between Bogota Financial and Franklin Financial
Given the investment horizon of 90 days Bogota Financial is expected to generate 25.06 times less return on investment than Franklin Financial. In addition to that, Bogota Financial is 1.05 times more volatile than Franklin Financial Services. It trades about 0.0 of its total potential returns per unit of risk. Franklin Financial Services is currently generating about 0.07 per unit of volatility. If you would invest 2,787 in Franklin Financial Services on November 9, 2024 and sell it today you would earn a total of 893.00 from holding Franklin Financial Services or generate 32.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bogota Financial Corp vs. Franklin Financial Services
Performance |
| Timeline |
| Bogota Financial Corp |
| Franklin Financial |
Bogota Financial and Franklin Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bogota Financial and Franklin Financial
The main advantage of trading using opposite Bogota Financial and Franklin Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bogota Financial position performs unexpectedly, Franklin Financial 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 Franklin Financial will offset losses from the drop in Franklin Financial's long position.| Bogota Financial vs. Home Federal Bancorp | Bogota Financial vs. First Financial Northwest | Bogota Financial vs. First Northwest Bancorp | Bogota Financial vs. First Capital |
| Franklin Financial vs. Magyar Bancorp | Franklin Financial vs. Affinity Bancshares | Franklin Financial vs. Home Federal Bancorp | Franklin Financial vs. Sound Financial Bancorp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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