Correlation Between Freedom Bank and Franklin Credit
Can any of the company-specific risk be diversified away by investing in both Freedom Bank and Franklin Credit 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 Freedom Bank and Franklin Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freedom Bank of and Franklin Credit Management, you can compare the effects of market volatilities on Freedom Bank and Franklin Credit 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 Freedom Bank with a short position of Franklin Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Bank and Franklin Credit.
Diversification Opportunities for Freedom Bank and Franklin Credit
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Freedom and Franklin is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Bank of and Franklin Credit Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Credit Mana and Freedom Bank 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 Freedom Bank of are associated (or correlated) with Franklin Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Credit Mana has no effect on the direction of Freedom Bank i.e., Freedom Bank and Franklin Credit go up and down completely randomly.
Pair Corralation between Freedom Bank and Franklin Credit
Given the investment horizon of 90 days Freedom Bank of is expected to generate 0.11 times more return on investment than Franklin Credit. However, Freedom Bank of is 9.11 times less risky than Franklin Credit. It trades about -0.03 of its potential returns per unit of risk. Franklin Credit Management is currently generating about -0.11 per unit of risk. If you would invest 1,060 in Freedom Bank of on August 25, 2024 and sell it today you would lose (4.00) from holding Freedom Bank of or give up 0.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freedom Bank of vs. Franklin Credit Management
Performance |
| Timeline |
| Freedom Bank |
| Franklin Credit Mana |
Freedom Bank and Franklin Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Bank and Franklin Credit
The main advantage of trading using opposite Freedom Bank and Franklin Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Bank position performs unexpectedly, Franklin Credit 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 Franklin Credit will offset losses from the drop in Franklin Credit's long position.| Freedom Bank vs. Invesco High Income | Freedom Bank vs. Blackrock Muniholdings Ny | Freedom Bank vs. MFS Investment Grade | Freedom Bank vs. Federated Premier Municipal |
| Franklin Credit vs. Invesco High Income | Franklin Credit vs. Blackrock Muniholdings Ny | Franklin Credit vs. MFS Investment Grade | Franklin Credit vs. Federated Premier Municipal |
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.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Global Correlations Find global opportunities by holding instruments from different markets |