Correlation Between Franchise and Ammo
Can any of the company-specific risk be diversified away by investing in both Franchise and Ammo 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 Ammo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franchise Group and Ammo Inc, you can compare the effects of market volatilities on Franchise and Ammo 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 Ammo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franchise and Ammo.
Diversification Opportunities for Franchise and Ammo
Excellent diversification
The 3 months correlation between Franchise and Ammo is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Franchise Group and Ammo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ammo 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 Ammo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ammo Inc has no effect on the direction of Franchise i.e., Franchise and Ammo go up and down completely randomly.
Pair Corralation between Franchise and Ammo
If you would invest 121.00 in Ammo Inc on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Ammo Inc or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Franchise Group vs. Ammo Inc
Performance |
| Timeline |
| Franchise Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ammo Inc |
Franchise and Ammo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franchise and Ammo
The main advantage of trading using opposite Franchise and Ammo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franchise position performs unexpectedly, Ammo 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 Ammo will offset losses from the drop in Ammo's long position.| Franchise vs. IPG Photonics | Franchise vs. Evertz Technologies Limited | Franchise vs. Asure Software | Franchise vs. Usio Inc |
| Ammo vs. Sturm Ruger | Ammo vs. Kratos Defense Security | Ammo vs. VSE Corporation | Ammo vs. Smith Wesson Brands |
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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