Correlation Between Franklin Electric and Ballard Power
Can any of the company-specific risk be diversified away by investing in both Franklin Electric and Ballard Power 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 Electric and Ballard Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Electric Co and Ballard Power Systems, you can compare the effects of market volatilities on Franklin Electric and Ballard Power 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 Electric with a short position of Ballard Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Electric and Ballard Power.
Diversification Opportunities for Franklin Electric and Ballard Power
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Ballard is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Electric Co and Ballard Power Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballard Power Systems and Franklin Electric 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 Electric Co are associated (or correlated) with Ballard Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballard Power Systems has no effect on the direction of Franklin Electric i.e., Franklin Electric and Ballard Power go up and down completely randomly.
Pair Corralation between Franklin Electric and Ballard Power
Given the investment horizon of 90 days Franklin Electric Co is expected to generate 0.48 times more return on investment than Ballard Power. However, Franklin Electric Co is 2.09 times less risky than Ballard Power. It trades about 0.13 of its potential returns per unit of risk. Ballard Power Systems is currently generating about -0.14 per unit of risk. If you would invest 10,166 in Franklin Electric Co on August 25, 2024 and sell it today you would earn a total of 740.00 from holding Franklin Electric Co or generate 7.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Franklin Electric Co vs. Ballard Power Systems
Performance |
| Timeline |
| Franklin Electric |
| Ballard Power Systems |
Franklin Electric and Ballard Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Electric and Ballard Power
The main advantage of trading using opposite Franklin Electric and Ballard Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Electric position performs unexpectedly, Ballard Power 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 Ballard Power will offset losses from the drop in Ballard Power's long position.| Franklin Electric vs. Aquagold International | Franklin Electric vs. Morningstar Unconstrained Allocation | Franklin Electric vs. High Yield Municipal Fund | Franklin Electric vs. Thrivent High Yield |
| Ballard Power vs. Emerson Electric | Ballard Power vs. Eaton PLC | Ballard Power vs. Parker Hannifin | Ballard Power vs. Illinois Tool Works |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |