Correlation Between Franklin Credit and Premium Nickel
Can any of the company-specific risk be diversified away by investing in both Franklin Credit and Premium Nickel 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 Premium Nickel 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 Premium Nickel Resources, you can compare the effects of market volatilities on Franklin Credit and Premium Nickel 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 Premium Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Credit and Premium Nickel.
Diversification Opportunities for Franklin Credit and Premium Nickel
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Premium is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Credit Management and Premium Nickel Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premium Nickel Resources 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 Premium Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premium Nickel Resources has no effect on the direction of Franklin Credit i.e., Franklin Credit and Premium Nickel go up and down completely randomly.
Pair Corralation between Franklin Credit and Premium Nickel
Given the investment horizon of 90 days Franklin Credit Management is expected to generate 2.26 times more return on investment than Premium Nickel. However, Franklin Credit is 2.26 times more volatile than Premium Nickel Resources. It trades about 0.05 of its potential returns per unit of risk. Premium Nickel Resources is currently generating about -0.05 per unit of risk. If you would invest 11.00 in Franklin Credit Management on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Franklin Credit Management or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Credit Management vs. Premium Nickel Resources
Performance |
| Timeline |
| Franklin Credit Mana |
| Premium Nickel Resources |
Franklin Credit and Premium Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Credit and Premium Nickel
The main advantage of trading using opposite Franklin Credit and Premium Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Credit position performs unexpectedly, Premium Nickel 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 Premium Nickel will offset losses from the drop in Premium Nickel's long position.| Franklin Credit vs. Freedom Bank of | Franklin Credit vs. HUMANA INC | Franklin Credit vs. Barloworld Ltd ADR | Franklin Credit vs. Morningstar Unconstrained Allocation |
| Premium Nickel vs. East Africa Metals | Premium Nickel vs. Franklin Credit Management | Premium Nickel vs. Xiabuxiabu Catering Management | Premium Nickel vs. Century Aluminum |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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