Correlation Between Global Healthcare and Franklin Credit
Can any of the company-specific risk be diversified away by investing in both Global Healthcare and Franklin Credit 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 Global Healthcare and Franklin Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Healthcare REIT and Franklin Credit Management, you can compare the effects of market volatilities on Global Healthcare and Franklin Credit 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 Global Healthcare with a short position of Franklin Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Healthcare and Franklin Credit.
Diversification Opportunities for Global Healthcare and Franklin Credit
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and Franklin is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Global Healthcare REIT and Franklin Credit Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Credit Mana and Global Healthcare 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 Global Healthcare REIT are associated (or correlated) with Franklin Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Credit Mana has no effect on the direction of Global Healthcare i.e., Global Healthcare and Franklin Credit go up and down completely randomly.
Pair Corralation between Global Healthcare and Franklin Credit
Given the investment horizon of 90 days Global Healthcare is expected to generate 3.58 times less return on investment than Franklin Credit. In addition to that, Global Healthcare is 1.01 times more volatile than Franklin Credit Management. It trades about 0.04 of its total potential returns per unit of risk. Franklin Credit Management is currently generating about 0.15 per unit of volatility. If you would invest 10.00 in Franklin Credit Management on November 2, 2024 and sell it today you would earn a total of 15.00 from holding Franklin Credit Management or generate 150.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Healthcare REIT vs. Franklin Credit Management
Performance |
| Timeline |
| Global Healthcare REIT |
| Franklin Credit Mana |
Global Healthcare and Franklin Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Healthcare and Franklin Credit
The main advantage of trading using opposite Global Healthcare and Franklin Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Healthcare position performs unexpectedly, Franklin Credit 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 Franklin Credit will offset losses from the drop in Franklin Credit's long position.| Global Healthcare vs. FitLife Brands, Common | Global Healthcare vs. Tencent Music Entertainment | Global Healthcare vs. Marfrig Global Foods | Global Healthcare vs. BBB Foods |
| Franklin Credit vs. Global Healthcare REIT | Franklin Credit vs. Freedom Bank of | Franklin Credit vs. Hinto Energy | Franklin Credit vs. Ensurge |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |