Correlation Between Franklin Street and TruBridge
Can any of the company-specific risk be diversified away by investing in both Franklin Street and TruBridge 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 TruBridge 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 TruBridge, you can compare the effects of market volatilities on Franklin Street and TruBridge 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 TruBridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Street and TruBridge.
Diversification Opportunities for Franklin Street and TruBridge
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and TruBridge is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Street Properties and TruBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TruBridge 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 TruBridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TruBridge has no effect on the direction of Franklin Street i.e., Franklin Street and TruBridge go up and down completely randomly.
Pair Corralation between Franklin Street and TruBridge
Considering the 90-day investment horizon Franklin Street is expected to generate 3.55 times less return on investment than TruBridge. In addition to that, Franklin Street is 1.28 times more volatile than TruBridge. It trades about 0.07 of its total potential returns per unit of risk. TruBridge is currently generating about 0.31 per unit of volatility. If you would invest 1,195 in TruBridge on September 12, 2024 and sell it today you would earn a total of 649.00 from holding TruBridge or generate 54.31% 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. TruBridge
Performance |
| Timeline |
| Franklin Street Prop |
| TruBridge |
Franklin Street and TruBridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Street and TruBridge
The main advantage of trading using opposite Franklin Street and TruBridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Street position performs unexpectedly, TruBridge 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 TruBridge will offset losses from the drop in TruBridge's long position.| Franklin Street vs. Boston Properties | Franklin Street vs. Douglas Emmett | Franklin Street vs. Kilroy Realty Corp | Franklin Street vs. Alexandria Real Estate |
| TruBridge vs. Western Digital | TruBridge vs. Universal | TruBridge vs. Digi International | TruBridge vs. Valneva SE 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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