Correlation Between Franklin Credit and China Eastern
Can any of the company-specific risk be diversified away by investing in both Franklin Credit and China Eastern 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 China Eastern 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 China Eastern Airlines, you can compare the effects of market volatilities on Franklin Credit and China Eastern 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 China Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Credit and China Eastern.
Diversification Opportunities for Franklin Credit and China Eastern
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Credit Management and China Eastern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Eastern Airlines 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 China Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Eastern Airlines has no effect on the direction of Franklin Credit i.e., Franklin Credit and China Eastern go up and down completely randomly.
Pair Corralation between Franklin Credit and China Eastern
Given the investment horizon of 90 days Franklin Credit Management is expected to generate 5.71 times more return on investment than China Eastern. However, Franklin Credit is 5.71 times more volatile than China Eastern Airlines. It trades about 0.03 of its potential returns per unit of risk. China Eastern Airlines is currently generating about -0.06 per unit of risk. If you would invest 30.00 in Franklin Credit Management on September 3, 2024 and sell it today you would lose (19.00) from holding Franklin Credit Management or give up 63.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 16.16% |
| Values | Daily Returns |
Franklin Credit Management vs. China Eastern Airlines
Performance |
| Timeline |
| Franklin Credit Mana |
| China Eastern Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Franklin Credit and China Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Credit and China Eastern
The main advantage of trading using opposite Franklin Credit and China Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Credit position performs unexpectedly, China Eastern 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 China Eastern will offset losses from the drop in China Eastern's long position.| Franklin Credit vs. Global Healthcare REIT | Franklin Credit vs. Freedom Bank of | Franklin Credit vs. Hinto Energy | Franklin Credit vs. Ensurge |
| China Eastern vs. Arrow Electronics | China Eastern vs. Ambev SA ADR | China Eastern vs. Asure Software | China Eastern vs. Molson Coors Brewing |
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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