Correlation Between Franklin Credit and Turning Point
Can any of the company-specific risk be diversified away by investing in both Franklin Credit and Turning Point 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 Turning Point 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 Turning Point Brands, you can compare the effects of market volatilities on Franklin Credit and Turning Point 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 Turning Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Credit and Turning Point.
Diversification Opportunities for Franklin Credit and Turning Point
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Turning is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Credit Management and Turning Point Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turning Point Brands 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 Turning Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turning Point Brands has no effect on the direction of Franklin Credit i.e., Franklin Credit and Turning Point go up and down completely randomly.
Pair Corralation between Franklin Credit and Turning Point
Given the investment horizon of 90 days Franklin Credit Management is expected to under-perform the Turning Point. In addition to that, Franklin Credit is 2.32 times more volatile than Turning Point Brands. It trades about -0.11 of its total potential returns per unit of risk. Turning Point Brands is currently generating about 0.53 per unit of volatility. If you would invest 4,699 in Turning Point Brands on August 30, 2024 and sell it today you would earn a total of 1,442 from holding Turning Point Brands or generate 30.69% 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. Turning Point Brands
Performance |
| Timeline |
| Franklin Credit Mana |
| Turning Point Brands |
Franklin Credit and Turning Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Credit and Turning Point
The main advantage of trading using opposite Franklin Credit and Turning Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Credit position performs unexpectedly, Turning Point 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 Turning Point will offset losses from the drop in Turning Point's long position.| Franklin Credit vs. Invesco High Income | Franklin Credit vs. Blackrock Muniholdings Ny | Franklin Credit vs. Nuveen California Select | Franklin Credit vs. MFS Investment Grade |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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