Correlation Between Franklin Wireless and Deswell Industries
Can any of the company-specific risk be diversified away by investing in both Franklin Wireless and Deswell Industries 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 Deswell Industries 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 Deswell Industries, you can compare the effects of market volatilities on Franklin Wireless and Deswell Industries 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 Deswell Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Wireless and Deswell Industries.
Diversification Opportunities for Franklin Wireless and Deswell Industries
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Deswell is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Wireless Corp and Deswell Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deswell Industries 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 Deswell Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deswell Industries has no effect on the direction of Franklin Wireless i.e., Franklin Wireless and Deswell Industries go up and down completely randomly.
Pair Corralation between Franklin Wireless and Deswell Industries
Given the investment horizon of 90 days Franklin Wireless Corp is expected to generate 1.09 times more return on investment than Deswell Industries. However, Franklin Wireless is 1.09 times more volatile than Deswell Industries. It trades about 0.11 of its potential returns per unit of risk. Deswell Industries is currently generating about 0.0 per unit of risk. If you would invest 443.00 in Franklin Wireless Corp on November 1, 2024 and sell it today you would earn a total of 78.00 from holding Franklin Wireless Corp or generate 17.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Wireless Corp vs. Deswell Industries
Performance |
| Timeline |
| Franklin Wireless Corp |
| Deswell Industries |
Franklin Wireless and Deswell Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Wireless and Deswell Industries
The main advantage of trading using opposite Franklin Wireless and Deswell Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Wireless position performs unexpectedly, Deswell Industries 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 Deswell Industries will offset losses from the drop in Deswell Industries' 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 |
| Deswell Industries vs. Ieh Corp | Deswell Industries vs. LGL Group | Deswell Industries vs. SigmaTron International | Deswell Industries vs. Daktronics |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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