Correlation Between Franklin Street and NetEase
Can any of the company-specific risk be diversified away by investing in both Franklin Street and NetEase 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 NetEase 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 NetEase, you can compare the effects of market volatilities on Franklin Street and NetEase 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 NetEase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Street and NetEase.
Diversification Opportunities for Franklin Street and NetEase
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and NetEase is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Street Properties and NetEase in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetEase 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 NetEase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetEase has no effect on the direction of Franklin Street i.e., Franklin Street and NetEase go up and down completely randomly.
Pair Corralation between Franklin Street and NetEase
Considering the 90-day investment horizon Franklin Street is expected to generate 1.34 times less return on investment than NetEase. In addition to that, Franklin Street is 1.02 times more volatile than NetEase. It trades about 0.06 of its total potential returns per unit of risk. NetEase is currently generating about 0.08 per unit of volatility. If you would invest 7,757 in NetEase on September 3, 2024 and sell it today you would earn a total of 991.00 from holding NetEase or generate 12.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Street Properties vs. NetEase
Performance |
| Timeline |
| Franklin Street Prop |
| NetEase |
Franklin Street and NetEase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Street and NetEase
The main advantage of trading using opposite Franklin Street and NetEase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Street position performs unexpectedly, NetEase 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 NetEase will offset losses from the drop in NetEase's long position.| Franklin Street vs. Equity Commonwealth | Franklin Street vs. Cousins Properties Incorporated | Franklin Street vs. Creative Media Community | Franklin Street vs. Highwoods Properties |
| NetEase vs. Roblox Corp | NetEase vs. Skillz Platform | NetEase vs. Take Two Interactive Software | NetEase vs. Nintendo Co ADR |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Stocks Directory Find actively traded stocks across global markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |