Correlation Between Ford and Franklin Balance
Can any of the company-specific risk be diversified away by investing in both Ford and Franklin Balance 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 Ford and Franklin Balance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Franklin Balance Sheet, you can compare the effects of market volatilities on Ford and Franklin Balance 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 Ford with a short position of Franklin Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Franklin Balance.
Diversification Opportunities for Ford and Franklin Balance
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ford and Franklin is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Franklin Balance Sheet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Balance Sheet and Ford 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 Ford Motor are associated (or correlated) with Franklin Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Balance Sheet has no effect on the direction of Ford i.e., Ford and Franklin Balance go up and down completely randomly.
Pair Corralation between Ford and Franklin Balance
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Franklin Balance. In addition to that, Ford is 2.94 times more volatile than Franklin Balance Sheet. It trades about 0.0 of its total potential returns per unit of risk. Franklin Balance Sheet is currently generating about 0.13 per unit of volatility. If you would invest 3,321 in Franklin Balance Sheet on September 3, 2024 and sell it today you would earn a total of 468.00 from holding Franklin Balance Sheet or generate 14.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Franklin Balance Sheet
Performance |
| Timeline |
| Ford Motor |
| Franklin Balance Sheet |
Ford and Franklin Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Franklin Balance
The main advantage of trading using opposite Ford and Franklin Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Franklin Balance 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 Balance will offset losses from the drop in Franklin Balance's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Franklin Balance vs. Vanguard Institutional Short Term | Franklin Balance vs. Goldman Sachs Short | Franklin Balance vs. Jhancock Short Duration | Franklin Balance vs. Aqr Long Short Equity |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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