Correlation Between Franchise and Air T
Can any of the company-specific risk be diversified away by investing in both Franchise and Air T 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 Air T into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franchise Group and Air T Inc, you can compare the effects of market volatilities on Franchise and Air T 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 Air T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franchise and Air T.
Diversification Opportunities for Franchise and Air T
Modest diversification
The 3 months correlation between Franchise and Air is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Franchise Group and Air T Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air T Inc 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 Air T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air T Inc has no effect on the direction of Franchise i.e., Franchise and Air T go up and down completely randomly.
Pair Corralation between Franchise and Air T
If you would invest 1,524 in Air T Inc on August 31, 2024 and sell it today you would earn a total of 203.00 from holding Air T Inc or generate 13.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.43% |
| Values | Daily Returns |
Franchise Group vs. Air T Inc
Performance |
| Timeline |
| Franchise Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Air T Inc |
Franchise and Air T Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franchise and Air T
The main advantage of trading using opposite Franchise and Air T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franchise position performs unexpectedly, Air T 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 Air T will offset losses from the drop in Air T's long position.| Franchise vs. Pure Cycle | Franchise vs. Sphere Entertainment Co | Franchise vs. Transportadora de Gas | Franchise vs. Southwest Gas Holdings |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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