Correlation Between Old Dominion and Franklin Credit
Can any of the company-specific risk be diversified away by investing in both Old Dominion and Franklin Credit 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 Old Dominion and Franklin Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Dominion Freight and Franklin Credit Management, you can compare the effects of market volatilities on Old Dominion and Franklin Credit 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 Old Dominion with a short position of Franklin Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Dominion and Franklin Credit.
Diversification Opportunities for Old Dominion and Franklin Credit
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Old and Franklin is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Old Dominion Freight and Franklin Credit Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Credit Mana and Old Dominion 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 Old Dominion Freight are associated (or correlated) with Franklin Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Credit Mana has no effect on the direction of Old Dominion i.e., Old Dominion and Franklin Credit go up and down completely randomly.
Pair Corralation between Old Dominion and Franklin Credit
Given the investment horizon of 90 days Old Dominion is expected to generate 8.11 times less return on investment than Franklin Credit. But when comparing it to its historical volatility, Old Dominion Freight is 5.68 times less risky than Franklin Credit. It trades about 0.04 of its potential returns per unit of risk. Franklin Credit Management is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Franklin Credit Management on August 31, 2024 and sell it today you would earn a total of 1.00 from holding Franklin Credit Management or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Dominion Freight vs. Franklin Credit Management
Performance |
| Timeline |
| Old Dominion Freight |
| Franklin Credit Mana |
Old Dominion and Franklin Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Dominion and Franklin Credit
The main advantage of trading using opposite Old Dominion and Franklin Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Dominion position performs unexpectedly, Franklin Credit 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 Credit will offset losses from the drop in Franklin Credit's long position.| Old Dominion vs. ArcBest Corp | Old Dominion vs. Marten Transport | Old Dominion vs. Werner Enterprises | Old Dominion vs. Knight Transportation |
| Franklin Credit vs. HUMANA INC | Franklin Credit vs. SCOR PK | Franklin Credit vs. Aquagold International | Franklin Credit vs. Thrivent High Yield |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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