Correlation Between Franklin Credit and BBB Foods
Can any of the company-specific risk be diversified away by investing in both Franklin Credit and BBB Foods 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 BBB Foods 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 BBB Foods, you can compare the effects of market volatilities on Franklin Credit and BBB Foods 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 BBB Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Credit and BBB Foods.
Diversification Opportunities for Franklin Credit and BBB Foods
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and BBB is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Credit Management and BBB Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBB Foods 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 BBB Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBB Foods has no effect on the direction of Franklin Credit i.e., Franklin Credit and BBB Foods go up and down completely randomly.
Pair Corralation between Franklin Credit and BBB Foods
Given the investment horizon of 90 days Franklin Credit Management is expected to generate 4.63 times more return on investment than BBB Foods. However, Franklin Credit is 4.63 times more volatile than BBB Foods. It trades about 0.05 of its potential returns per unit of risk. BBB Foods is currently generating about 0.05 per unit of risk. If you would invest 11.00 in Franklin Credit Management on September 1, 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Credit Management vs. BBB Foods
Performance |
| Timeline |
| Franklin Credit Mana |
| BBB Foods |
Franklin Credit and BBB Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Credit and BBB Foods
The main advantage of trading using opposite Franklin Credit and BBB Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Credit position performs unexpectedly, BBB Foods 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 BBB Foods will offset losses from the drop in BBB Foods' long position.| Franklin Credit vs. Global Healthcare REIT | Franklin Credit vs. Freedom Bank of | Franklin Credit vs. Hinto Energy | Franklin Credit vs. Ensurge |
| BBB Foods vs. Ingles Markets Incorporated | BBB Foods vs. Grocery Outlet Holding | BBB Foods vs. Ocado Group plc | BBB Foods vs. Sprouts Farmers Market |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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