Correlation Between Franklin Covey and AMREP
Can any of the company-specific risk be diversified away by investing in both Franklin Covey and AMREP 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 AMREP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Covey and AMREP, you can compare the effects of market volatilities on Franklin Covey and AMREP 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 AMREP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Covey and AMREP.
Diversification Opportunities for Franklin Covey and AMREP
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and AMREP is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Covey and AMREP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMREP 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 AMREP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMREP has no effect on the direction of Franklin Covey i.e., Franklin Covey and AMREP go up and down completely randomly.
Pair Corralation between Franklin Covey and AMREP
Allowing for the 90-day total investment horizon Franklin Covey is expected to under-perform the AMREP. But the stock apears to be less risky and, when comparing its historical volatility, Franklin Covey is 2.35 times less risky than AMREP. The stock trades about -0.17 of its potential returns per unit of risk. The AMREP is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,558 in AMREP on September 13, 2024 and sell it today you would earn a total of 42.00 from holding AMREP or generate 1.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Covey vs. AMREP
Performance |
Timeline |
Franklin Covey |
AMREP |
Franklin Covey and AMREP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Covey and AMREP
The main advantage of trading using opposite Franklin Covey and AMREP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Covey position performs unexpectedly, AMREP 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 AMREP will offset losses from the drop in AMREP's long position.Franklin Covey vs. CRA International | Franklin Covey vs. Thermon Group Holdings | Franklin Covey vs. Forrester Research | Franklin Covey vs. Forestar Group |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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