Correlation Between Franklin Wireless and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Franklin Wireless and Coca Cola 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 Coca Cola 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 The Coca Cola, you can compare the effects of market volatilities on Franklin Wireless and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Wireless and Coca Cola.
Diversification Opportunities for Franklin Wireless and Coca Cola
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and Coca is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Wireless Corp and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of Franklin Wireless i.e., Franklin Wireless and Coca Cola go up and down completely randomly.
Pair Corralation between Franklin Wireless and Coca Cola
Given the investment horizon of 90 days Franklin Wireless Corp is expected to generate 2.73 times more return on investment than Coca Cola. However, Franklin Wireless is 2.73 times more volatile than The Coca Cola. It trades about 0.13 of its potential returns per unit of risk. The Coca Cola is currently generating about 0.05 per unit of risk. If you would invest 305.00 in Franklin Wireless Corp on August 24, 2024 and sell it today you would earn a total of 125.00 from holding Franklin Wireless Corp or generate 40.98% 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. The Coca Cola
Performance |
| Timeline |
| Franklin Wireless Corp |
| Coca Cola |
Franklin Wireless and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Wireless and Coca Cola
The main advantage of trading using opposite Franklin Wireless and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Wireless position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola'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 |
| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. Vita Coco |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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