Correlation Between Creative Media and Franklin Street
Can any of the company-specific risk be diversified away by investing in both Creative Media and Franklin Street 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 Creative Media and Franklin Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Creative Media Community and Franklin Street Properties, you can compare the effects of market volatilities on Creative Media and Franklin Street 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 Creative Media with a short position of Franklin Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creative Media and Franklin Street.
Diversification Opportunities for Creative Media and Franklin Street
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Creative and Franklin is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Creative Media Community and Franklin Street Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Street Prop and Creative Media 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 Creative Media Community are associated (or correlated) with Franklin Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Street Prop has no effect on the direction of Creative Media i.e., Creative Media and Franklin Street go up and down completely randomly.
Pair Corralation between Creative Media and Franklin Street
Given the investment horizon of 90 days Creative Media Community is expected to under-perform the Franklin Street. In addition to that, Creative Media is 5.03 times more volatile than Franklin Street Properties. It trades about -0.39 of its total potential returns per unit of risk. Franklin Street Properties is currently generating about -0.04 per unit of volatility. If you would invest 185.00 in Franklin Street Properties on November 3, 2024 and sell it today you would lose (4.00) from holding Franklin Street Properties or give up 2.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Creative Media Community vs. Franklin Street Properties
Performance |
| Timeline |
| Creative Media Community |
| Franklin Street Prop |
Creative Media and Franklin Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creative Media and Franklin Street
The main advantage of trading using opposite Creative Media and Franklin Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creative Media position performs unexpectedly, Franklin Street 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 Street will offset losses from the drop in Franklin Street's long position.| Creative Media vs. Cousins Properties Incorporated | Creative Media vs. Highwoods Properties | Creative Media vs. Douglas Emmett | Creative Media vs. Equity Commonwealth |
| Franklin Street vs. Cousins Properties Incorporated | Franklin Street vs. Creative Media Community | Franklin Street vs. Highwoods Properties | Franklin Street vs. Douglas Emmett |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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