Correlation Between Naked Wines and Franklin Wireless
Can any of the company-specific risk be diversified away by investing in both Naked Wines 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 Naked Wines and Franklin Wireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naked Wines plc and Franklin Wireless Corp, you can compare the effects of market volatilities on Naked Wines 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 Naked Wines with a short position of Franklin Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naked Wines and Franklin Wireless.
Diversification Opportunities for Naked Wines and Franklin Wireless
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Naked and Franklin is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Naked Wines plc 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 Naked Wines 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 Naked Wines plc 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 Naked Wines i.e., Naked Wines and Franklin Wireless go up and down completely randomly.
Pair Corralation between Naked Wines and Franklin Wireless
Assuming the 90 days horizon Naked Wines plc is expected to generate 0.84 times more return on investment than Franklin Wireless. However, Naked Wines plc is 1.19 times less risky than Franklin Wireless. It trades about 0.22 of its potential returns per unit of risk. Franklin Wireless Corp is currently generating about 0.04 per unit of risk. If you would invest 252.00 in Naked Wines plc on August 27, 2024 and sell it today you would earn a total of 19.00 from holding Naked Wines plc or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Naked Wines plc vs. Franklin Wireless Corp
Performance |
| Timeline |
| Naked Wines plc |
| Franklin Wireless Corp |
Naked Wines and Franklin Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naked Wines and Franklin Wireless
The main advantage of trading using opposite Naked Wines and Franklin Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naked Wines 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.| Naked Wines vs. Diageo PLC ADR | Naked Wines vs. Constellation Brands Class | Naked Wines vs. Morningstar Unconstrained Allocation | Naked Wines vs. SEI Investments |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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