Correlation Between Franklin Wireless and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Franklin Wireless and Sealed Air 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 Sealed Air 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 Sealed Air, you can compare the effects of market volatilities on Franklin Wireless and Sealed Air 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 Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Wireless and Sealed Air.
Diversification Opportunities for Franklin Wireless and Sealed Air
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and Sealed is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Wireless Corp and Sealed Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air 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 Sealed Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sealed Air has no effect on the direction of Franklin Wireless i.e., Franklin Wireless and Sealed Air go up and down completely randomly.
Pair Corralation between Franklin Wireless and Sealed Air
Given the investment horizon of 90 days Franklin Wireless Corp is expected to generate 2.58 times more return on investment than Sealed Air. However, Franklin Wireless is 2.58 times more volatile than Sealed Air. It trades about 0.24 of its potential returns per unit of risk. Sealed Air is currently generating about -0.14 per unit of risk. If you would invest 529.00 in Franklin Wireless Corp on November 29, 2024 and sell it today you would earn a total of 117.00 from holding Franklin Wireless Corp or generate 22.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Wireless Corp vs. Sealed Air
Performance |
| Timeline |
| Franklin Wireless Corp |
| Sealed Air |
Franklin Wireless and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Wireless and Sealed Air
The main advantage of trading using opposite Franklin Wireless and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Wireless position performs unexpectedly, Sealed Air 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 Sealed Air will offset losses from the drop in Sealed Air'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 |
| Sealed Air vs. Avery Dennison Corp | Sealed Air vs. International Paper | Sealed Air vs. Sonoco Products | Sealed Air vs. Packaging Corp of |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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