Correlation Between Equifax and Franklin Covey
Can any of the company-specific risk be diversified away by investing in both Equifax and Franklin Covey 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 Equifax and Franklin Covey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equifax and Franklin Covey, you can compare the effects of market volatilities on Equifax and Franklin Covey 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 Equifax with a short position of Franklin Covey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equifax and Franklin Covey.
Diversification Opportunities for Equifax and Franklin Covey
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Equifax and Franklin is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Equifax and Franklin Covey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Covey and Equifax 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 Equifax are associated (or correlated) with Franklin Covey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Covey has no effect on the direction of Equifax i.e., Equifax and Franklin Covey go up and down completely randomly.
Pair Corralation between Equifax and Franklin Covey
Considering the 90-day investment horizon Equifax is expected to generate 0.46 times more return on investment than Franklin Covey. However, Equifax is 2.2 times less risky than Franklin Covey. It trades about -0.04 of its potential returns per unit of risk. Franklin Covey is currently generating about -0.08 per unit of risk. If you would invest 26,960 in Equifax on August 28, 2024 and sell it today you would lose (571.00) from holding Equifax or give up 2.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equifax vs. Franklin Covey
Performance |
| Timeline |
| Equifax |
| Franklin Covey |
Equifax and Franklin Covey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equifax and Franklin Covey
The main advantage of trading using opposite Equifax and Franklin Covey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equifax position performs unexpectedly, Franklin Covey 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 Covey will offset losses from the drop in Franklin Covey's long position.| Equifax vs. Franklin Covey | Equifax vs. TransUnion | Equifax vs. ICF International | Equifax vs. Huron Consulting Group |
| Franklin Covey vs. CRA International | Franklin Covey vs. Thermon Group Holdings | Franklin Covey vs. Forrester Research | Franklin Covey vs. Forestar Group |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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