Correlation Between Franklin Covey and Lichen China
Can any of the company-specific risk be diversified away by investing in both Franklin Covey and Lichen China 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 Lichen China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Covey and Lichen China Limited, you can compare the effects of market volatilities on Franklin Covey and Lichen China 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 Lichen China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Covey and Lichen China.
Diversification Opportunities for Franklin Covey and Lichen China
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Lichen is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Covey and Lichen China Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lichen China Limited 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 Lichen China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lichen China Limited has no effect on the direction of Franklin Covey i.e., Franklin Covey and Lichen China go up and down completely randomly.
Pair Corralation between Franklin Covey and Lichen China
Allowing for the 90-day total investment horizon Franklin Covey is expected to under-perform the Lichen China. But the stock apears to be less risky and, when comparing its historical volatility, Franklin Covey is 1.62 times less risky than Lichen China. The stock trades about -0.07 of its potential returns per unit of risk. The Lichen China Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 187.00 in Lichen China Limited on August 27, 2024 and sell it today you would lose (3.00) from holding Lichen China Limited or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Covey vs. Lichen China Limited
Performance |
| Timeline |
| Franklin Covey |
| Lichen China Limited |
Franklin Covey and Lichen China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Covey and Lichen China
The main advantage of trading using opposite Franklin Covey and Lichen China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Covey position performs unexpectedly, Lichen China 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 Lichen China will offset losses from the drop in Lichen China's long position.| Franklin Covey vs. CRA International | Franklin Covey vs. Thermon Group Holdings | Franklin Covey vs. Forrester Research | Franklin Covey vs. Forestar Group |
| Lichen China vs. Genpact Limited | Lichen China vs. Broadridge Financial Solutions | Lichen China vs. First Advantage Corp | Lichen China vs. Franklin Covey |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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