Correlation Between Cousins Properties and Franklin Street

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

By analyzing existing cross correlation between Cousins Properties Incorporated and Franklin Street Properties, you can compare the effects of market volatilities on Cousins Properties 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 Cousins Properties with a short position of Franklin Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cousins Properties and Franklin Street.

Diversification Opportunities for Cousins Properties and Franklin Street

0.41

Correlation Coefficient

Cousins Properties  Franklin Street

Very weak diversification

The 3 months correlation between Cousins and Franklin is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Cousins Properties Incorporate 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 Cousins Properties 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 Cousins Properties Incorporated 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 Cousins Properties i.e., Cousins Properties and Franklin Street go up and down completely randomly.

Pair Corralation between Cousins Properties and Franklin Street

Considering the 90-day investment horizon Cousins Properties is expected to generate 10.21 times less return on investment than Franklin Street. But when comparing it to its historical volatility, Cousins Properties Incorporated is 1.28 times less risky than Franklin Street. It trades about 0.0 of its potential returns per unit of risk. Franklin Street Properties is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  182.00  in Franklin Street Properties on December 29, 2024 and sell it today you would earn a total of  4.00  from holding Franklin Street Properties or generate 2.2% return on investment over 90 days.

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

Cousins Properties Incorporate  vs.  Franklin Street Properties

Cousins Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cousins Properties Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Cousins Properties is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Franklin Street Prop

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Street Properties are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Franklin Street is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Cousins Properties and Franklin Street

The main advantage of trading using opposite Cousins Properties and Franklin Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cousins Properties 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.

The idea behind Cousins Properties Incorporated and Franklin Street Properties 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.