Correlation Between Franklin Electric and Intevac
Can any of the company-specific risk be diversified away by investing in both Franklin Electric and Intevac 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 Intevac 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 Intevac, you can compare the effects of market volatilities on Franklin Electric and Intevac 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 Intevac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Electric and Intevac.
Diversification Opportunities for Franklin Electric and Intevac
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Intevac is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Electric Co and Intevac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intevac 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 Intevac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intevac has no effect on the direction of Franklin Electric i.e., Franklin Electric and Intevac go up and down completely randomly.
Pair Corralation between Franklin Electric and Intevac
Given the investment horizon of 90 days Franklin Electric Co is expected to generate 0.44 times more return on investment than Intevac. However, Franklin Electric Co is 2.25 times less risky than Intevac. It trades about 0.2 of its potential returns per unit of risk. Intevac is currently generating about -0.14 per unit of risk. If you would invest 9,871 in Franklin Electric Co on September 3, 2024 and sell it today you would earn a total of 959.00 from holding Franklin Electric Co or generate 9.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Electric Co vs. Intevac
Performance |
| Timeline |
| Franklin Electric |
| Intevac |
Franklin Electric and Intevac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Electric and Intevac
The main advantage of trading using opposite Franklin Electric and Intevac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Electric position performs unexpectedly, Intevac 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 Intevac will offset losses from the drop in Intevac's long position.| Franklin Electric vs. Graco Inc | Franklin Electric vs. Ametek Inc | Franklin Electric vs. Flowserve | Franklin Electric vs. Donaldson |
| Intevac vs. Innovative Solutions and | Intevac vs. Heidrick Struggles International | Intevac vs. ICF International | Intevac vs. PDF Solutions |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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