Correlation Between Franklin Credit and Shengkai Innovations
Can any of the company-specific risk be diversified away by investing in both Franklin Credit and Shengkai Innovations 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 Shengkai Innovations 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 Shengkai Innovations, you can compare the effects of market volatilities on Franklin Credit and Shengkai Innovations 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 Shengkai Innovations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Credit and Shengkai Innovations.
Diversification Opportunities for Franklin Credit and Shengkai Innovations
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Shengkai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Credit Management and Shengkai Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shengkai Innovations 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 Shengkai Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shengkai Innovations has no effect on the direction of Franklin Credit i.e., Franklin Credit and Shengkai Innovations go up and down completely randomly.
Pair Corralation between Franklin Credit and Shengkai Innovations
If you would invest 21.00 in Franklin Credit Management on September 12, 2024 and sell it today you would lose (10.00) from holding Franklin Credit Management or give up 47.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.28% |
| Values | Daily Returns |
Franklin Credit Management vs. Shengkai Innovations
Performance |
| Timeline |
| Franklin Credit Mana |
| Shengkai Innovations |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Franklin Credit and Shengkai Innovations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Credit and Shengkai Innovations
The main advantage of trading using opposite Franklin Credit and Shengkai Innovations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Credit position performs unexpectedly, Shengkai Innovations 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 Shengkai Innovations will offset losses from the drop in Shengkai Innovations' 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 |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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