Correlation Between Franklin Credit and National Beverage
Can any of the company-specific risk be diversified away by investing in both Franklin Credit and National Beverage 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 National Beverage 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 National Beverage Corp, you can compare the effects of market volatilities on Franklin Credit and National Beverage 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 National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Credit and National Beverage.
Diversification Opportunities for Franklin Credit and National Beverage
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and National is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Credit Management and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp 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 National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of Franklin Credit i.e., Franklin Credit and National Beverage go up and down completely randomly.
Pair Corralation between Franklin Credit and National Beverage
Given the investment horizon of 90 days Franklin Credit Management is expected to generate 6.34 times more return on investment than National Beverage. However, Franklin Credit is 6.34 times more volatile than National Beverage Corp. It trades about 0.05 of its potential returns per unit of risk. National Beverage Corp is currently generating about 0.02 per unit of risk. If you would invest 10.00 in Franklin Credit Management on September 2, 2024 and sell it today you would earn a total of 1.00 from holding Franklin Credit Management or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Credit Management vs. National Beverage Corp
Performance |
| Timeline |
| Franklin Credit Mana |
| National Beverage Corp |
Franklin Credit and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Credit and National Beverage
The main advantage of trading using opposite Franklin Credit and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Credit position performs unexpectedly, National Beverage 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 National Beverage will offset losses from the drop in National Beverage'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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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