Correlation Between Franklin Electric and Yokogawa Electric
Can any of the company-specific risk be diversified away by investing in both Franklin Electric and Yokogawa Electric 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 Yokogawa Electric 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 Yokogawa Electric, you can compare the effects of market volatilities on Franklin Electric and Yokogawa Electric 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 Yokogawa Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Electric and Yokogawa Electric.
Diversification Opportunities for Franklin Electric and Yokogawa Electric
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Yokogawa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Electric Co and Yokogawa Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yokogawa Electric 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 Yokogawa Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yokogawa Electric has no effect on the direction of Franklin Electric i.e., Franklin Electric and Yokogawa Electric go up and down completely randomly.
Pair Corralation between Franklin Electric and Yokogawa Electric
Given the investment horizon of 90 days Franklin Electric Co is expected to generate 0.02 times more return on investment than Yokogawa Electric. However, Franklin Electric Co is 51.92 times less risky than Yokogawa Electric. It trades about 0.05 of its potential returns per unit of risk. Yokogawa Electric is currently generating about -0.09 per unit of risk. If you would invest 7,879 in Franklin Electric Co on August 29, 2024 and sell it today you would earn a total of 2,925 from holding Franklin Electric Co or generate 37.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 31.45% |
| Values | Daily Returns |
Franklin Electric Co vs. Yokogawa Electric
Performance |
| Timeline |
| Franklin Electric |
| Yokogawa Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Franklin Electric and Yokogawa Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Electric and Yokogawa Electric
The main advantage of trading using opposite Franklin Electric and Yokogawa Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Electric position performs unexpectedly, Yokogawa Electric 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 Yokogawa Electric will offset losses from the drop in Yokogawa Electric's long position.| Franklin Electric vs. Parker Hannifin | Franklin Electric vs. Capital Income Builder | Franklin Electric vs. Direxion Daily FTSE | Franklin Electric vs. Dodge Global Stock |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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