Correlation Between Coca Cola and Franklin Wireless
Can any of the company-specific risk be diversified away by investing in both Coca Cola 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 Coca Cola and Franklin Wireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Coca Cola and Franklin Wireless Corp, you can compare the effects of market volatilities on Coca Cola 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 Coca Cola with a short position of Franklin Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Franklin Wireless.
Diversification Opportunities for Coca Cola and Franklin Wireless
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Coca and Franklin is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola 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 Coca Cola 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 The Coca Cola 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 Coca Cola i.e., Coca Cola and Franklin Wireless go up and down completely randomly.
Pair Corralation between Coca Cola and Franklin Wireless
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 5.34 times less return on investment than Franklin Wireless. But when comparing it to its historical volatility, The Coca Cola is 3.11 times less risky than Franklin Wireless. It trades about 0.02 of its potential returns per unit of risk. Franklin Wireless Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 329.00 in Franklin Wireless Corp on August 27, 2024 and sell it today you would earn a total of 96.00 from holding Franklin Wireless Corp or generate 29.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Franklin Wireless Corp
Performance |
| Timeline |
| Coca Cola |
| Franklin Wireless Corp |
Coca Cola and Franklin Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Franklin Wireless
The main advantage of trading using opposite Coca Cola and Franklin Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola 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.| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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