Correlation Between National Retail and Franklin Street
Can any of the company-specific risk be diversified away by investing in both National Retail 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 National Retail and Franklin Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Retail Properties and Franklin Street Properties, you can compare the effects of market volatilities on National Retail 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 National Retail with a short position of Franklin Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Retail and Franklin Street.
Diversification Opportunities for National Retail and Franklin Street
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and Franklin is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding National Retail Properties 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 National Retail 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 Retail Properties 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 National Retail i.e., National Retail and Franklin Street go up and down completely randomly.
Pair Corralation between National Retail and Franklin Street
Considering the 90-day investment horizon National Retail Properties is expected to under-perform the Franklin Street. But the stock apears to be less risky and, when comparing its historical volatility, National Retail Properties is 2.23 times less risky than Franklin Street. The stock trades about -0.23 of its potential returns per unit of risk. The Franklin Street Properties is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 176.00 in Franklin Street Properties on August 24, 2024 and sell it today you would earn a total of 19.00 from holding Franklin Street Properties or generate 10.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
National Retail Properties vs. Franklin Street Properties
Performance |
| Timeline |
| National Retail Prop |
| Franklin Street Prop |
National Retail and Franklin Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Retail and Franklin Street
The main advantage of trading using opposite National Retail and Franklin Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Retail 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.| National Retail vs. Federal Realty Investment | National Retail vs. Agree Realty | National Retail vs. Tanger Factory Outlet | National Retail vs. Netstreit Corp |
| Franklin Street vs. Cousins Properties Incorporated | Franklin Street vs. Highwoods Properties | Franklin Street vs. Douglas Emmett | Franklin Street vs. Equity Commonwealth |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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