Correlation Between Franklin Financial and Parke Bancorp
Can any of the company-specific risk be diversified away by investing in both Franklin Financial and Parke Bancorp 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 Financial and Parke Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Financial Services and Parke Bancorp, you can compare the effects of market volatilities on Franklin Financial and Parke Bancorp 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 Financial with a short position of Parke Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Financial and Parke Bancorp.
Diversification Opportunities for Franklin Financial and Parke Bancorp
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Parke is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Financial Services and Parke Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parke Bancorp and Franklin Financial 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 Financial Services are associated (or correlated) with Parke Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parke Bancorp has no effect on the direction of Franklin Financial i.e., Franklin Financial and Parke Bancorp go up and down completely randomly.
Pair Corralation between Franklin Financial and Parke Bancorp
Given the investment horizon of 90 days Franklin Financial Services is expected to generate 0.99 times more return on investment than Parke Bancorp. However, Franklin Financial Services is 1.01 times less risky than Parke Bancorp. It trades about 0.29 of its potential returns per unit of risk. Parke Bancorp is currently generating about 0.27 per unit of risk. If you would invest 3,008 in Franklin Financial Services on August 27, 2024 and sell it today you would earn a total of 339.00 from holding Franklin Financial Services or generate 11.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Financial Services vs. Parke Bancorp
Performance |
| Timeline |
| Franklin Financial |
| Parke Bancorp |
Franklin Financial and Parke Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Financial and Parke Bancorp
The main advantage of trading using opposite Franklin Financial and Parke Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Financial position performs unexpectedly, Parke Bancorp 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 Parke Bancorp will offset losses from the drop in Parke Bancorp's long position.| Franklin Financial vs. Magyar Bancorp | Franklin Financial vs. Affinity Bancshares | Franklin Financial vs. Home Federal Bancorp | Franklin Financial vs. Sound Financial Bancorp |
| Parke Bancorp vs. Sound Financial Bancorp | Parke Bancorp vs. Finward Bancorp | Parke Bancorp vs. Franklin Financial Services | Parke Bancorp vs. Community West Bancshares |
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.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |