Correlation Between Franklin BSP and Ready Capital
Can any of the company-specific risk be diversified away by investing in both Franklin BSP and Ready Capital 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 Franklin BSP and Ready Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin BSP Realty and Ready Capital Corp, you can compare the effects of market volatilities on Franklin BSP and Ready Capital 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 Franklin BSP with a short position of Ready Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin BSP and Ready Capital.
Diversification Opportunities for Franklin BSP and Ready Capital
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and Ready is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Franklin BSP Realty and Ready Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ready Capital Corp and Franklin BSP 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 Franklin BSP Realty are associated (or correlated) with Ready Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ready Capital Corp has no effect on the direction of Franklin BSP i.e., Franklin BSP and Ready Capital go up and down completely randomly.
Pair Corralation between Franklin BSP and Ready Capital
Given the investment horizon of 90 days Franklin BSP Realty is expected to under-perform the Ready Capital. But the stock apears to be less risky and, when comparing its historical volatility, Franklin BSP Realty is 1.53 times less risky than Ready Capital. The stock trades about 0.0 of its potential returns per unit of risk. The Ready Capital Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 691.00 in Ready Capital Corp on August 28, 2024 and sell it today you would earn a total of 46.00 from holding Ready Capital Corp or generate 6.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin BSP Realty vs. Ready Capital Corp
Performance |
| Timeline |
| Franklin BSP Realty |
| Ready Capital Corp |
Franklin BSP and Ready Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin BSP and Ready Capital
The main advantage of trading using opposite Franklin BSP and Ready Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin BSP position performs unexpectedly, Ready Capital 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 Ready Capital will offset losses from the drop in Ready Capital's long position.| Franklin BSP vs. AGNC Investment Corp | Franklin BSP vs. Aquagold International | Franklin BSP vs. Morningstar Unconstrained Allocation | Franklin BSP vs. Thrivent High Yield |
| Ready Capital vs. Blackstone Mortgage Trust | Ready Capital vs. Omega Healthcare Investors | Ready Capital vs. Medical Properties Trust |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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