Correlation Between Franklin Credit and Bridger Aerospace
Can any of the company-specific risk be diversified away by investing in both Franklin Credit and Bridger Aerospace 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 Credit and Bridger Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Credit Management and Bridger Aerospace Group, you can compare the effects of market volatilities on Franklin Credit and Bridger Aerospace 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 Credit with a short position of Bridger Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Credit and Bridger Aerospace.
Diversification Opportunities for Franklin Credit and Bridger Aerospace
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Bridger is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Credit Management and Bridger Aerospace Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridger Aerospace and Franklin Credit 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 Credit Management are associated (or correlated) with Bridger Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridger Aerospace has no effect on the direction of Franklin Credit i.e., Franklin Credit and Bridger Aerospace go up and down completely randomly.
Pair Corralation between Franklin Credit and Bridger Aerospace
Given the investment horizon of 90 days Franklin Credit is expected to generate 33.26 times less return on investment than Bridger Aerospace. But when comparing it to its historical volatility, Franklin Credit Management is 11.51 times less risky than Bridger Aerospace. It trades about 0.05 of its potential returns per unit of risk. Bridger Aerospace Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Bridger Aerospace Group on September 3, 2024 and sell it today you would lose (3.00) from holding Bridger Aerospace Group or give up 23.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 73.6% |
| Values | Daily Returns |
Franklin Credit Management vs. Bridger Aerospace Group
Performance |
| Timeline |
| Franklin Credit Mana |
| Bridger Aerospace |
Franklin Credit and Bridger Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Credit and Bridger Aerospace
The main advantage of trading using opposite Franklin Credit and Bridger Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Credit position performs unexpectedly, Bridger Aerospace 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 Bridger Aerospace will offset losses from the drop in Bridger Aerospace's long position.| Franklin Credit vs. Global Healthcare REIT | Franklin Credit vs. Freedom Bank of | Franklin Credit vs. Hinto Energy | Franklin Credit vs. Ensurge |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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