Correlation Between Franklin Electric and Crane NXT
Can any of the company-specific risk be diversified away by investing in both Franklin Electric and Crane NXT 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 Crane NXT 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 Crane NXT Co, you can compare the effects of market volatilities on Franklin Electric and Crane NXT 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 Crane NXT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Electric and Crane NXT.
Diversification Opportunities for Franklin Electric and Crane NXT
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Crane is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Electric Co and Crane NXT Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crane NXT 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 Crane NXT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crane NXT has no effect on the direction of Franklin Electric i.e., Franklin Electric and Crane NXT go up and down completely randomly.
Pair Corralation between Franklin Electric and Crane NXT
Given the investment horizon of 90 days Franklin Electric is expected to generate 1.59 times less return on investment than Crane NXT. But when comparing it to its historical volatility, Franklin Electric Co is 1.22 times less risky than Crane NXT. It trades about 0.03 of its potential returns per unit of risk. Crane NXT Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,719 in Crane NXT Co on August 27, 2024 and sell it today you would earn a total of 1,292 from holding Crane NXT Co or generate 27.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Electric Co vs. Crane NXT Co
Performance |
| Timeline |
| Franklin Electric |
| Crane NXT |
Franklin Electric and Crane NXT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Electric and Crane NXT
The main advantage of trading using opposite Franklin Electric and Crane NXT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Electric position performs unexpectedly, Crane NXT 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 Crane NXT will offset losses from the drop in Crane NXT'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 |
| Crane NXT vs. Donaldson | Crane NXT vs. ITT Inc | Crane NXT vs. Franklin Electric Co | Crane NXT vs. Enerpac Tool Group |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |