Correlation Between Enersys and Franklin Credit
Can any of the company-specific risk be diversified away by investing in both Enersys and Franklin Credit 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 Enersys and Franklin Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enersys and Franklin Credit Management, you can compare the effects of market volatilities on Enersys and Franklin Credit 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 Enersys with a short position of Franklin Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enersys and Franklin Credit.
Diversification Opportunities for Enersys and Franklin Credit
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enersys and Franklin is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Enersys and Franklin Credit Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Credit Mana and Enersys 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 Enersys are associated (or correlated) with Franklin Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Credit Mana has no effect on the direction of Enersys i.e., Enersys and Franklin Credit go up and down completely randomly.
Pair Corralation between Enersys and Franklin Credit
Considering the 90-day investment horizon Enersys is expected to generate 7.87 times less return on investment than Franklin Credit. But when comparing it to its historical volatility, Enersys is 6.34 times less risky than Franklin Credit. It trades about 0.03 of its potential returns per unit of risk. Franklin Credit Management is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Franklin Credit Management on August 25, 2024 and sell it today you would lose (1.00) from holding Franklin Credit Management or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Enersys vs. Franklin Credit Management
Performance |
| Timeline |
| Enersys |
| Franklin Credit Mana |
Enersys and Franklin Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enersys and Franklin Credit
The main advantage of trading using opposite Enersys and Franklin Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enersys position performs unexpectedly, Franklin Credit 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 Credit will offset losses from the drop in Franklin Credit's long position.| Enersys vs. Advanced Energy Industries | Enersys vs. Hubbell | Enersys vs. Acuity Brands | Enersys vs. Kimball Electronics |
| Franklin Credit vs. Invesco High Income | Franklin Credit vs. Blackrock Muniholdings Ny | Franklin Credit vs. MFS Investment Grade | Franklin Credit vs. Federated Premier Municipal |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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