Correlation Between Polished and Franchise
Can any of the company-specific risk be diversified away by investing in both Polished and Franchise 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 Polished and Franchise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polished and Franchise Group, you can compare the effects of market volatilities on Polished and Franchise 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 Polished with a short position of Franchise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polished and Franchise.
Diversification Opportunities for Polished and Franchise
Pay attention - limited upside
The 3 months correlation between Polished and Franchise is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Polished and Franchise Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franchise Group and Polished 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 Polished are associated (or correlated) with Franchise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franchise Group has no effect on the direction of Polished i.e., Polished and Franchise go up and down completely randomly.
Pair Corralation between Polished and Franchise
If you would invest 2,970 in Franchise Group on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Franchise Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polished vs. Franchise Group
Performance |
| Timeline |
| Polished |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Franchise Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Polished and Franchise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polished and Franchise
The main advantage of trading using opposite Polished and Franchise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polished position performs unexpectedly, Franchise 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 Franchise will offset losses from the drop in Franchise's long position.| Polished vs. Sally Beauty Holdings | Polished vs. National Vision Holdings | Polished vs. Big 5 Sporting | Polished vs. Pet Acquisition LLC |
| Franchise vs. Mega Uranium | Franchise vs. Laramide Resources | Franchise vs. NXG NextGen Infrastructure | Franchise vs. Pinetree Capital |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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