Correlation Between National CineMedia and Franklin Wireless
Can any of the company-specific risk be diversified away by investing in both National CineMedia 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 National CineMedia and Franklin Wireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Franklin Wireless Corp, you can compare the effects of market volatilities on National CineMedia 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 National CineMedia with a short position of Franklin Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Franklin Wireless.
Diversification Opportunities for National CineMedia and Franklin Wireless
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and Franklin is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia 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 National CineMedia 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 National CineMedia 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 National CineMedia i.e., National CineMedia and Franklin Wireless go up and down completely randomly.
Pair Corralation between National CineMedia and Franklin Wireless
Given the investment horizon of 90 days National CineMedia is expected to generate 3.32 times less return on investment than Franklin Wireless. In addition to that, National CineMedia is 1.69 times more volatile than Franklin Wireless Corp. It trades about 0.04 of its total potential returns per unit of risk. Franklin Wireless Corp is currently generating about 0.22 per unit of volatility. If you would invest 449.00 in Franklin Wireless Corp on October 23, 2024 and sell it today you would earn a total of 34.50 from holding Franklin Wireless Corp or generate 7.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National CineMedia vs. Franklin Wireless Corp
Performance |
| Timeline |
| National CineMedia |
| Franklin Wireless Corp |
National CineMedia and Franklin Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Franklin Wireless
The main advantage of trading using opposite National CineMedia and Franklin Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia 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.| National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Glory Star New | National CineMedia vs. Impact Fusion International |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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