Correlation Between ICU Medical and Franklin Wireless
Can any of the company-specific risk be diversified away by investing in both ICU Medical and Franklin Wireless 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 ICU Medical and Franklin Wireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICU Medical and Franklin Wireless Corp, you can compare the effects of market volatilities on ICU Medical and Franklin Wireless 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 ICU Medical with a short position of Franklin Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICU Medical and Franklin Wireless.
Diversification Opportunities for ICU Medical and Franklin Wireless
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ICU and Franklin is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding ICU Medical and Franklin Wireless Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Wireless Corp and ICU Medical 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 ICU Medical are associated (or correlated) with Franklin Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Wireless Corp has no effect on the direction of ICU Medical i.e., ICU Medical and Franklin Wireless go up and down completely randomly.
Pair Corralation between ICU Medical and Franklin Wireless
Given the investment horizon of 90 days ICU Medical is expected to generate 1.26 times more return on investment than Franklin Wireless. However, ICU Medical is 1.26 times more volatile than Franklin Wireless Corp. It trades about 0.11 of its potential returns per unit of risk. Franklin Wireless Corp is currently generating about 0.11 per unit of risk. If you would invest 10,250 in ICU Medical on September 1, 2024 and sell it today you would earn a total of 6,146 from holding ICU Medical or generate 59.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICU Medical vs. Franklin Wireless Corp
Performance |
| Timeline |
| ICU Medical |
| Franklin Wireless Corp |
ICU Medical and Franklin Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICU Medical and Franklin Wireless
The main advantage of trading using opposite ICU Medical and Franklin Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICU Medical position performs unexpectedly, Franklin Wireless 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 Wireless will offset losses from the drop in Franklin Wireless' long position.| ICU Medical vs. Merit Medical Systems | ICU Medical vs. The Cooper Companies, | ICU Medical vs. AngioDynamics | ICU Medical vs. AptarGroup |
| Franklin Wireless vs. Wialan Technologies | Franklin Wireless vs. TPT Global Tech | Franklin Wireless vs. Moving iMage Technologies | Franklin Wireless vs. Comtech Telecommunications Corp |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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