Correlation Between Franklin Credit and 00206RAN2

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Can any of the company-specific risk be diversified away by investing in both Franklin Credit and 00206RAN2 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 00206RAN2 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 ATT INC 64, you can compare the effects of market volatilities on Franklin Credit and 00206RAN2 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 00206RAN2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Credit and 00206RAN2.

Diversification Opportunities for Franklin Credit and 00206RAN2

0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between Franklin and 00206RAN2 is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Credit Management and ATT INC 64 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT INC 64 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 00206RAN2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT INC 64 has no effect on the direction of Franklin Credit i.e., Franklin Credit and 00206RAN2 go up and down completely randomly.

Pair Corralation between Franklin Credit and 00206RAN2

Given the investment horizon of 90 days Franklin Credit Management is expected to under-perform the 00206RAN2. In addition to that, Franklin Credit is 6.5 times more volatile than ATT INC 64. It trades about -0.11 of its total potential returns per unit of risk. ATT INC 64 is currently generating about -0.45 per unit of volatility. If you would invest  10,549  in ATT INC 64 on September 2, 2024 and sell it today you would lose (165.00) from holding ATT INC 64 or give up 1.56% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy19.05%
ValuesDaily Returns

Franklin Credit Management  vs.  ATT INC 64

 Performance 
       Timeline  
Franklin Credit Mana 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Credit Management are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Franklin Credit displayed solid returns over the last few months and may actually be approaching a breakup point.
ATT INC 64 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ATT INC 64 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite sluggish performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for ATT INC 64 investors.

Franklin Credit and 00206RAN2 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Franklin Credit and 00206RAN2

The main advantage of trading using opposite Franklin Credit and 00206RAN2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Credit position performs unexpectedly, 00206RAN2 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 00206RAN2 will offset losses from the drop in 00206RAN2's long position.
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The idea behind Franklin Credit Management and ATT INC 64 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

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