Correlation Between Franklin Wireless and Axalta Coating
Can any of the company-specific risk be diversified away by investing in both Franklin Wireless and Axalta Coating 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 Wireless and Axalta Coating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Wireless Corp and Axalta Coating Systems, you can compare the effects of market volatilities on Franklin Wireless and Axalta Coating 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 Wireless with a short position of Axalta Coating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Wireless and Axalta Coating.
Diversification Opportunities for Franklin Wireless and Axalta Coating
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Axalta is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Wireless Corp and Axalta Coating Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axalta Coating Systems and Franklin Wireless 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 Wireless Corp are associated (or correlated) with Axalta Coating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axalta Coating Systems has no effect on the direction of Franklin Wireless i.e., Franklin Wireless and Axalta Coating go up and down completely randomly.
Pair Corralation between Franklin Wireless and Axalta Coating
Given the investment horizon of 90 days Franklin Wireless is expected to generate 15.42 times less return on investment than Axalta Coating. But when comparing it to its historical volatility, Franklin Wireless Corp is 1.12 times less risky than Axalta Coating. It trades about 0.02 of its potential returns per unit of risk. Axalta Coating Systems is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 3,559 in Axalta Coating Systems on August 29, 2024 and sell it today you would earn a total of 499.00 from holding Axalta Coating Systems or generate 14.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Wireless Corp vs. Axalta Coating Systems
Performance |
| Timeline |
| Franklin Wireless Corp |
| Axalta Coating Systems |
Franklin Wireless and Axalta Coating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Wireless and Axalta Coating
The main advantage of trading using opposite Franklin Wireless and Axalta Coating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Wireless position performs unexpectedly, Axalta Coating 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 Axalta Coating will offset losses from the drop in Axalta Coating's long position.| Franklin Wireless vs. Wialan Technologies | Franklin Wireless vs. TPT Global Tech | Franklin Wireless vs. Moving iMage Technologies | Franklin Wireless vs. Comtech Telecommunications Corp |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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