Correlation Between Nike and Franklin Wireless
Can any of the company-specific risk be diversified away by investing in both Nike 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 Nike and Franklin Wireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nike Inc and Franklin Wireless Corp, you can compare the effects of market volatilities on Nike 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 Nike with a short position of Franklin Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nike and Franklin Wireless.
Diversification Opportunities for Nike and Franklin Wireless
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nike and Franklin is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Nike Inc 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 Nike 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 Nike Inc 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 Nike i.e., Nike and Franklin Wireless go up and down completely randomly.
Pair Corralation between Nike and Franklin Wireless
Considering the 90-day investment horizon Nike Inc is expected to under-perform the Franklin Wireless. But the stock apears to be less risky and, when comparing its historical volatility, Nike Inc is 1.23 times less risky than Franklin Wireless. The stock trades about -0.03 of its potential returns per unit of risk. The Franklin Wireless Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 365.00 in Franklin Wireless Corp on September 1, 2024 and sell it today you would earn a total of 65.00 from holding Franklin Wireless Corp or generate 17.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nike Inc vs. Franklin Wireless Corp
Performance |
| Timeline |
| Nike Inc |
| Franklin Wireless Corp |
Nike and Franklin Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nike and Franklin Wireless
The main advantage of trading using opposite Nike and Franklin Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nike 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.The idea behind Nike Inc and Franklin Wireless Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |