Correlation Between Luther Burbank and Franklin Financial
Can any of the company-specific risk be diversified away by investing in both Luther Burbank and Franklin Financial 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 Luther Burbank and Franklin Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luther Burbank and Franklin Financial Services, you can compare the effects of market volatilities on Luther Burbank and Franklin Financial 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 Luther Burbank with a short position of Franklin Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luther Burbank and Franklin Financial.
Diversification Opportunities for Luther Burbank and Franklin Financial
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Luther and Franklin is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Luther Burbank and Franklin Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Financial and Luther Burbank 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 Luther Burbank are associated (or correlated) with Franklin Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Financial has no effect on the direction of Luther Burbank i.e., Luther Burbank and Franklin Financial go up and down completely randomly.
Pair Corralation between Luther Burbank and Franklin Financial
Considering the 90-day investment horizon Luther Burbank is expected to under-perform the Franklin Financial. In addition to that, Luther Burbank is 1.59 times more volatile than Franklin Financial Services. It trades about -0.03 of its total potential returns per unit of risk. Franklin Financial Services is currently generating about 0.03 per unit of volatility. If you would invest 2,738 in Franklin Financial Services on September 3, 2024 and sell it today you would earn a total of 624.00 from holding Franklin Financial Services or generate 22.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 30.91% |
| Values | Daily Returns |
Luther Burbank vs. Franklin Financial Services
Performance |
| Timeline |
| Luther Burbank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Franklin Financial |
Luther Burbank and Franklin Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luther Burbank and Franklin Financial
The main advantage of trading using opposite Luther Burbank and Franklin Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luther Burbank position performs unexpectedly, Franklin Financial 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 Financial will offset losses from the drop in Franklin Financial's long position.| Luther Burbank vs. First Community | Luther Burbank vs. Community West Bancshares | Luther Burbank vs. First Financial Northwest | Luther Burbank vs. First Northwest Bancorp |
| Franklin Financial vs. JPMorgan Chase Co | Franklin Financial vs. Citigroup | Franklin Financial vs. Wells Fargo | Franklin Financial vs. Toronto Dominion Bank |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |