Correlation Between Franklin Wireless and Western Digital
Can any of the company-specific risk be diversified away by investing in both Franklin Wireless and Western Digital 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 Western Digital 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 Western Digital, you can compare the effects of market volatilities on Franklin Wireless and Western Digital 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 Western Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Wireless and Western Digital.
Diversification Opportunities for Franklin Wireless and Western Digital
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Western is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Wireless Corp and Western Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Digital 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 Western Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Digital has no effect on the direction of Franklin Wireless i.e., Franklin Wireless and Western Digital go up and down completely randomly.
Pair Corralation between Franklin Wireless and Western Digital
Given the investment horizon of 90 days Franklin Wireless Corp is expected to generate 0.9 times more return on investment than Western Digital. However, Franklin Wireless Corp is 1.11 times less risky than Western Digital. It trades about 0.12 of its potential returns per unit of risk. Western Digital is currently generating about 0.01 per unit of risk. If you would invest 309.00 in Franklin Wireless Corp on September 1, 2024 and sell it today you would earn a total of 121.00 from holding Franklin Wireless Corp or generate 39.16% 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. Western Digital
Performance |
| Timeline |
| Franklin Wireless Corp |
| Western Digital |
Franklin Wireless and Western Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Wireless and Western Digital
The main advantage of trading using opposite Franklin Wireless and Western Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Wireless position performs unexpectedly, Western Digital 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 Western Digital will offset losses from the drop in Western Digital'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 |
| Western Digital vs. Rigetti Computing | Western Digital vs. D Wave Quantum | Western Digital vs. IONQ Inc | Western Digital vs. Desktop Metal |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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