Correlation Between Esoterica NextG and Franklin Exponential
Can any of the company-specific risk be diversified away by investing in both Esoterica NextG and Franklin Exponential 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 Esoterica NextG and Franklin Exponential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esoterica NextG Economy and Franklin Exponential Data, you can compare the effects of market volatilities on Esoterica NextG and Franklin Exponential 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 Esoterica NextG with a short position of Franklin Exponential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esoterica NextG and Franklin Exponential.
Diversification Opportunities for Esoterica NextG and Franklin Exponential
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Esoterica and Franklin is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Esoterica NextG Economy and Franklin Exponential Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Exponential Data and Esoterica NextG 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 Esoterica NextG Economy are associated (or correlated) with Franklin Exponential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Exponential Data has no effect on the direction of Esoterica NextG i.e., Esoterica NextG and Franklin Exponential go up and down completely randomly.
Pair Corralation between Esoterica NextG and Franklin Exponential
Given the investment horizon of 90 days Esoterica NextG Economy is expected to generate 1.25 times more return on investment than Franklin Exponential. However, Esoterica NextG is 1.25 times more volatile than Franklin Exponential Data. It trades about 0.1 of its potential returns per unit of risk. Franklin Exponential Data is currently generating about 0.08 per unit of risk. If you would invest 3,625 in Esoterica NextG Economy on November 2, 2024 and sell it today you would earn a total of 3,935 from holding Esoterica NextG Economy or generate 108.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Esoterica NextG Economy vs. Franklin Exponential Data
Performance |
| Timeline |
| Esoterica NextG Economy |
| Franklin Exponential Data |
Esoterica NextG and Franklin Exponential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esoterica NextG and Franklin Exponential
The main advantage of trading using opposite Esoterica NextG and Franklin Exponential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esoterica NextG position performs unexpectedly, Franklin Exponential 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 Exponential will offset losses from the drop in Franklin Exponential's long position.| Esoterica NextG vs. First Trust NASDAQ | Esoterica NextG vs. Franklin Disruptive Commerce | Esoterica NextG vs. TrueShares Technology AI | Esoterica NextG vs. Innovator Loup Frontier |
| Franklin Exponential vs. Franklin Disruptive Commerce | Franklin Exponential vs. Franklin Templeton ETF | Franklin Exponential vs. Esoterica NextG Economy | Franklin Exponential vs. TrueShares Technology AI |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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