Correlation Between Franchise and Build A
Can any of the company-specific risk be diversified away by investing in both Franchise and Build A 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 Franchise and Build A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franchise Group and Build A Bear Workshop, you can compare the effects of market volatilities on Franchise and Build A 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 Franchise with a short position of Build A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franchise and Build A.
Diversification Opportunities for Franchise and Build A
Average diversification
The 3 months correlation between Franchise and Build is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Franchise Group and Build A Bear Workshop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Build A Bear and Franchise 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 Franchise Group are associated (or correlated) with Build A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Build A Bear has no effect on the direction of Franchise i.e., Franchise and Build A go up and down completely randomly.
Pair Corralation between Franchise and Build A
If you would invest 2,970 in Franchise Group on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Franchise Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Franchise Group vs. Build A Bear Workshop
Performance |
| Timeline |
| Franchise Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Build A Bear |
Franchise and Build A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franchise and Build A
The main advantage of trading using opposite Franchise and Build A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franchise position performs unexpectedly, Build A 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 Build A will offset losses from the drop in Build A's long position.| Franchise vs. Mega Uranium | Franchise vs. Laramide Resources | Franchise vs. NXG NextGen Infrastructure | Franchise vs. Pinetree Capital |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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