Correlation Between Franklin Street and Allied Properties
Can any of the company-specific risk be diversified away by investing in both Franklin Street and Allied Properties 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 Street and Allied Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Street Properties and Allied Properties Real, you can compare the effects of market volatilities on Franklin Street and Allied Properties 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 Street with a short position of Allied Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Street and Allied Properties.
Diversification Opportunities for Franklin Street and Allied Properties
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Allied is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Street Properties and Allied Properties Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Properties Real and Franklin Street 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 Street Properties are associated (or correlated) with Allied Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Properties Real has no effect on the direction of Franklin Street i.e., Franklin Street and Allied Properties go up and down completely randomly.
Pair Corralation between Franklin Street and Allied Properties
Considering the 90-day investment horizon Franklin Street Properties is expected to under-perform the Allied Properties. But the stock apears to be less risky and, when comparing its historical volatility, Franklin Street Properties is 1.89 times less risky than Allied Properties. The stock trades about -0.01 of its potential returns per unit of risk. The Allied Properties Real is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,749 in Allied Properties Real on November 5, 2024 and sell it today you would lose (548.00) from holding Allied Properties Real or give up 31.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.7% |
| Values | Daily Returns |
Franklin Street Properties vs. Allied Properties Real
Performance |
| Timeline |
| Franklin Street Prop |
| Allied Properties Real |
Franklin Street and Allied Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Street and Allied Properties
The main advantage of trading using opposite Franklin Street and Allied Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Street position performs unexpectedly, Allied Properties 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 Allied Properties will offset losses from the drop in Allied Properties' long position.| Franklin Street vs. Cousins Properties Incorporated | Franklin Street vs. Creative Media Community | Franklin Street vs. Highwoods Properties | Franklin Street vs. Douglas Emmett |
| Allied Properties vs. Slate Office REIT | Allied Properties vs. Keppel REIT | Allied Properties vs. BTB Real Estate | Allied Properties vs. Franklin Street Properties |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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