Correlation Between Franklin Covey and Alight
Can any of the company-specific risk be diversified away by investing in both Franklin Covey and Alight 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 Covey and Alight into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Covey and Alight Inc, you can compare the effects of market volatilities on Franklin Covey and Alight 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 Covey with a short position of Alight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Covey and Alight.
Diversification Opportunities for Franklin Covey and Alight
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Alight is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Covey and Alight Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alight Inc and Franklin Covey 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 Covey are associated (or correlated) with Alight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alight Inc has no effect on the direction of Franklin Covey i.e., Franklin Covey and Alight go up and down completely randomly.
Pair Corralation between Franklin Covey and Alight
Allowing for the 90-day total investment horizon Franklin Covey is expected to under-perform the Alight. In addition to that, Franklin Covey is 1.03 times more volatile than Alight Inc. It trades about -0.09 of its total potential returns per unit of risk. Alight Inc is currently generating about 0.13 per unit of volatility. If you would invest 712.00 in Alight Inc on August 24, 2024 and sell it today you would earn a total of 76.00 from holding Alight Inc or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Covey vs. Alight Inc
Performance |
| Timeline |
| Franklin Covey |
| Alight Inc |
Franklin Covey and Alight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Covey and Alight
The main advantage of trading using opposite Franklin Covey and Alight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Covey position performs unexpectedly, Alight 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 Alight will offset losses from the drop in Alight's long position.| 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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