Correlation Between Franklin Wireless and Bausch Lomb
Can any of the company-specific risk be diversified away by investing in both Franklin Wireless and Bausch Lomb 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 Bausch Lomb 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 Bausch Lomb Corp, you can compare the effects of market volatilities on Franklin Wireless and Bausch Lomb 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 Bausch Lomb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Wireless and Bausch Lomb.
Diversification Opportunities for Franklin Wireless and Bausch Lomb
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Bausch is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Wireless Corp and Bausch Lomb Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bausch Lomb Corp 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 Bausch Lomb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bausch Lomb Corp has no effect on the direction of Franklin Wireless i.e., Franklin Wireless and Bausch Lomb go up and down completely randomly.
Pair Corralation between Franklin Wireless and Bausch Lomb
Given the investment horizon of 90 days Franklin Wireless Corp is expected to generate 0.91 times more return on investment than Bausch Lomb. However, Franklin Wireless Corp is 1.09 times less risky than Bausch Lomb. It trades about 0.08 of its potential returns per unit of risk. Bausch Lomb Corp is currently generating about 0.05 per unit of risk. If you would invest 285.00 in Franklin Wireless Corp on August 25, 2024 and sell it today you would earn a total of 140.00 from holding Franklin Wireless Corp or generate 49.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Wireless Corp vs. Bausch Lomb Corp
Performance |
| Timeline |
| Franklin Wireless Corp |
| Bausch Lomb Corp |
Franklin Wireless and Bausch Lomb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Wireless and Bausch Lomb
The main advantage of trading using opposite Franklin Wireless and Bausch Lomb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Wireless position performs unexpectedly, Bausch Lomb 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 Bausch Lomb will offset losses from the drop in Bausch Lomb's long position.| Franklin Wireless vs. Ichor Holdings | Franklin Wireless vs. Fabrinet | Franklin Wireless vs. Hello Group | Franklin Wireless vs. Ultra Clean Holdings |
| Bausch Lomb vs. Heartbeam | Bausch Lomb vs. EUDA Health Holdings | Bausch Lomb vs. Nutex Health | Bausch Lomb vs. Healthcare Triangle |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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