Correlation Between Franklin Street and Kontoor Brands
Can any of the company-specific risk be diversified away by investing in both Franklin Street and Kontoor Brands 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 Kontoor Brands 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 Kontoor Brands, you can compare the effects of market volatilities on Franklin Street and Kontoor Brands 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 Kontoor Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Street and Kontoor Brands.
Diversification Opportunities for Franklin Street and Kontoor Brands
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Kontoor is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Street Properties and Kontoor Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kontoor Brands 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 Kontoor Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kontoor Brands has no effect on the direction of Franklin Street i.e., Franklin Street and Kontoor Brands go up and down completely randomly.
Pair Corralation between Franklin Street and Kontoor Brands
Considering the 90-day investment horizon Franklin Street Properties is expected to under-perform the Kontoor Brands. In addition to that, Franklin Street is 1.34 times more volatile than Kontoor Brands. It trades about -0.01 of its total potential returns per unit of risk. Kontoor Brands is currently generating about 0.09 per unit of volatility. If you would invest 3,795 in Kontoor Brands on September 5, 2024 and sell it today you would earn a total of 5,610 from holding Kontoor Brands or generate 147.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Street Properties vs. Kontoor Brands
Performance |
| Timeline |
| Franklin Street Prop |
| Kontoor Brands |
Franklin Street and Kontoor Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Street and Kontoor Brands
The main advantage of trading using opposite Franklin Street and Kontoor Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Street position performs unexpectedly, Kontoor Brands 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 Kontoor Brands will offset losses from the drop in Kontoor Brands' long position.| Franklin Street vs. Equity Commonwealth | Franklin Street vs. Cousins Properties Incorporated | Franklin Street vs. Creative Media Community | Franklin Street vs. Highwoods Properties |
| Kontoor Brands vs. VF Corporation | Kontoor Brands vs. Levi Strauss Co | Kontoor Brands vs. Under Armour A | Kontoor Brands vs. Columbia Sportswear |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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