Correlation Between Mid Atlantic and Franklin Street
Can any of the company-specific risk be diversified away by investing in both Mid Atlantic and Franklin Street 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 Mid Atlantic and Franklin Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Atlantic Home Health and Franklin Street Properties, you can compare the effects of market volatilities on Mid Atlantic and Franklin Street 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 Mid Atlantic with a short position of Franklin Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Atlantic and Franklin Street.
Diversification Opportunities for Mid Atlantic and Franklin Street
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mid and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mid Atlantic Home Health and Franklin Street Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Street Prop and Mid Atlantic 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 Mid Atlantic Home Health are associated (or correlated) with Franklin Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Street Prop has no effect on the direction of Mid Atlantic i.e., Mid Atlantic and Franklin Street go up and down completely randomly.
Pair Corralation between Mid Atlantic and Franklin Street
Given the investment horizon of 90 days Mid Atlantic Home Health is expected to under-perform the Franklin Street. In addition to that, Mid Atlantic is 1.59 times more volatile than Franklin Street Properties. It trades about -0.06 of its total potential returns per unit of risk. Franklin Street Properties is currently generating about -0.01 per unit of volatility. If you would invest 283.00 in Franklin Street Properties on September 2, 2024 and sell it today you would lose (92.00) from holding Franklin Street Properties or give up 32.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mid Atlantic Home Health vs. Franklin Street Properties
Performance |
| Timeline |
| Mid Atlantic Home |
| Franklin Street Prop |
Mid Atlantic and Franklin Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mid Atlantic and Franklin Street
The main advantage of trading using opposite Mid Atlantic and Franklin Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Atlantic position performs unexpectedly, Franklin Street 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 Street will offset losses from the drop in Franklin Street's long position.| Mid Atlantic vs. Pennant Group | Mid Atlantic vs. Encompass Health Corp | Mid Atlantic vs. Enhabit | Mid Atlantic vs. Concord Medical Services |
| Franklin Street vs. Equity Commonwealth | Franklin Street vs. Cousins Properties Incorporated | Franklin Street vs. Creative Media Community | Franklin Street vs. Highwoods Properties |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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