Correlation Between Enovis Corp and Franklin Electric
Can any of the company-specific risk be diversified away by investing in both Enovis Corp and Franklin Electric 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 Enovis Corp and Franklin Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enovis Corp and Franklin Electric Co, you can compare the effects of market volatilities on Enovis Corp and Franklin Electric 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 Enovis Corp with a short position of Franklin Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enovis Corp and Franklin Electric.
Diversification Opportunities for Enovis Corp and Franklin Electric
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Enovis and Franklin is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Enovis Corp and Franklin Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Electric and Enovis Corp 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 Enovis Corp are associated (or correlated) with Franklin Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Electric has no effect on the direction of Enovis Corp i.e., Enovis Corp and Franklin Electric go up and down completely randomly.
Pair Corralation between Enovis Corp and Franklin Electric
Given the investment horizon of 90 days Enovis Corp is expected to under-perform the Franklin Electric. In addition to that, Enovis Corp is 1.26 times more volatile than Franklin Electric Co. It trades about -0.06 of its total potential returns per unit of risk. Franklin Electric Co is currently generating about 0.03 per unit of volatility. If you would invest 10,321 in Franklin Electric Co on August 27, 2024 and sell it today you would earn a total of 585.00 from holding Franklin Electric Co or generate 5.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enovis Corp vs. Franklin Electric Co
Performance |
| Timeline |
| Enovis Corp |
| Franklin Electric |
Enovis Corp and Franklin Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enovis Corp and Franklin Electric
The main advantage of trading using opposite Enovis Corp and Franklin Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enovis Corp position performs unexpectedly, Franklin Electric 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 Electric will offset losses from the drop in Franklin Electric's long position.| Enovis Corp vs. Heartbeam | Enovis Corp vs. EUDA Health Holdings | Enovis Corp vs. Nutex Health | Enovis Corp vs. Healthcare Triangle |
| Franklin Electric vs. Aquagold International | Franklin Electric vs. Morningstar Unconstrained Allocation | Franklin Electric vs. High Yield Municipal Fund | Franklin Electric vs. Thrivent High Yield |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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