Correlation Between Franklin Wireless and Bank of America
Can any of the company-specific risk be diversified away by investing in both Franklin Wireless and Bank of America 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 Bank of America 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 Bank of America, you can compare the effects of market volatilities on Franklin Wireless and Bank of America 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 Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Wireless and Bank of America.
Diversification Opportunities for Franklin Wireless and Bank of America
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Bank is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Wireless Corp and Bank of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of America 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 Bank of America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of America has no effect on the direction of Franklin Wireless i.e., Franklin Wireless and Bank of America go up and down completely randomly.
Pair Corralation between Franklin Wireless and Bank of America
Given the investment horizon of 90 days Franklin Wireless Corp is expected to generate 12.05 times more return on investment than Bank of America. However, Franklin Wireless is 12.05 times more volatile than Bank of America. It trades about 0.25 of its potential returns per unit of risk. Bank of America is currently generating about 0.0 per unit of risk. If you would invest 516.00 in Franklin Wireless Corp on December 10, 2024 and sell it today you would earn a total of 116.00 from holding Franklin Wireless Corp or generate 22.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Wireless Corp vs. Bank of America
Performance |
| Timeline |
| Franklin Wireless Corp |
| Bank of America |
Franklin Wireless and Bank of America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Wireless and Bank of America
The main advantage of trading using opposite Franklin Wireless and Bank of America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Wireless position performs unexpectedly, Bank of America 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 Bank of America will offset losses from the drop in Bank of America'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 |
| Bank of America vs. Avarone Metals | Bank of America vs. Perseus Mining Limited | Bank of America vs. Copperbank Resources Corp | Bank of America vs. Cytek Biosciences |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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