Correlation Between Franchise and Old National
Can any of the company-specific risk be diversified away by investing in both Franchise and Old National 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 Old National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franchise Group and Old National Bancorp, you can compare the effects of market volatilities on Franchise and Old National 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 Old National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franchise and Old National.
Diversification Opportunities for Franchise and Old National
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Franchise and Old is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Franchise Group and Old National Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old National Bancorp 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 Old National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old National Bancorp has no effect on the direction of Franchise i.e., Franchise and Old National go up and down completely randomly.
Pair Corralation between Franchise and Old National
If you would invest 2,513 in Old National Bancorp on October 21, 2024 and sell it today you would earn a total of 2.00 from holding Old National Bancorp or generate 0.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.26% |
| Values | Daily Returns |
Franchise Group vs. Old National Bancorp
Performance |
| Timeline |
| Franchise Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Old National Bancorp |
Franchise and Old National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franchise and Old National
The main advantage of trading using opposite Franchise and Old National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franchise position performs unexpectedly, Old National 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 Old National will offset losses from the drop in Old National's long position.| Franchise vs. Merit Medical Systems | Franchise vs. Envista Holdings Corp | Franchise vs. HNI Corp | Franchise vs. Saia Inc |
| Old National vs. Old National Bancorp | Old National vs. Pinnacle Financial Partners | Old National vs. Heartland Financial USA | Old National vs. OceanFirst Financial Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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