Correlation Between Franklin Wireless and Pinterest
Can any of the company-specific risk be diversified away by investing in both Franklin Wireless and Pinterest 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 Pinterest 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 Pinterest, you can compare the effects of market volatilities on Franklin Wireless and Pinterest 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 Pinterest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Wireless and Pinterest.
Diversification Opportunities for Franklin Wireless and Pinterest
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Pinterest is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Wireless Corp and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest 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 Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of Franklin Wireless i.e., Franklin Wireless and Pinterest go up and down completely randomly.
Pair Corralation between Franklin Wireless and Pinterest
Given the investment horizon of 90 days Franklin Wireless Corp is expected to under-perform the Pinterest. But the stock apears to be less risky and, when comparing its historical volatility, Franklin Wireless Corp is 1.73 times less risky than Pinterest. The stock trades about -0.11 of its potential returns per unit of risk. The Pinterest is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 3,237 in Pinterest on August 30, 2024 and sell it today you would lose (205.00) from holding Pinterest or give up 6.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Wireless Corp vs. Pinterest
Performance |
| Timeline |
| Franklin Wireless Corp |
Franklin Wireless and Pinterest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Wireless and Pinterest
The main advantage of trading using opposite Franklin Wireless and Pinterest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Wireless position performs unexpectedly, Pinterest 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 Pinterest will offset losses from the drop in Pinterest's long position.| Franklin Wireless vs. Knowles Cor | Franklin Wireless vs. AudioCodes | Franklin Wireless vs. Ituran Location and | Franklin Wireless vs. Aviat Networks |
| Pinterest vs. Twilio Inc | Pinterest vs. Meta Platforms | Pinterest vs. Alphabet Inc Class C | Pinterest vs. Alphabet Inc Class A |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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