Correlation Between Surgical Science and Franklin Libertyshares

Can any of the company-specific risk be diversified away by investing in both Surgical Science and Franklin Libertyshares 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 Surgical Science and Franklin Libertyshares into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Surgical Science Sweden and Franklin Libertyshares ICAV, you can compare the effects of market volatilities on Surgical Science and Franklin Libertyshares 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 Surgical Science with a short position of Franklin Libertyshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surgical Science and Franklin Libertyshares.

Diversification Opportunities for Surgical Science and Franklin Libertyshares

0.11

Correlation Coefficient

Surgical Science  Franklin Libertyshares

Average diversification

The 3 months correlation between Surgical and Franklin is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Surgical Science Sweden and Franklin Libertyshares ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Libertyshares and Surgical Science 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 Surgical Science Sweden are associated (or correlated) with Franklin Libertyshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Libertyshares has no effect on the direction of Surgical Science i.e., Surgical Science and Franklin Libertyshares go up and down completely randomly.

Pair Corralation between Surgical Science and Franklin Libertyshares

Assuming the 90 days trading horizon Surgical Science Sweden is expected to generate 3.48 times more return on investment than Franklin Libertyshares. However, Surgical Science is 3.48 times more volatile than Franklin Libertyshares ICAV. It trades about 0.04 of its potential returns per unit of risk. Franklin Libertyshares ICAV is currently generating about 0.02 per unit of risk. If you would invest  15,120  in Surgical Science Sweden on December 2, 2024 and sell it today you would earn a total of  630.00  from holding Surgical Science Sweden or generate 4.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Surgical Science Sweden  vs.  Franklin Libertyshares ICAV

Surgical Science Sweden

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Surgical Science Sweden are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Surgical Science may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Franklin Libertyshares

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Libertyshares ICAV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Franklin Libertyshares is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Surgical Science and Franklin Libertyshares

The main advantage of trading using opposite Surgical Science and Franklin Libertyshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surgical Science position performs unexpectedly, Franklin Libertyshares 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 Libertyshares will offset losses from the drop in Franklin Libertyshares' long position.

The idea behind Surgical Science Sweden and Franklin Libertyshares ICAV 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.