Correlation Between Franklin Covey and Steel Connect

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

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

Diversification Opportunities for Franklin Covey and Steel Connect

-0.32

Correlation Coefficient

Franklin Covey  Steel Connect

Very good diversification

The 3 months correlation between Franklin and Steel is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Covey and Steel Connect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Connect and Franklin Covey 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 Franklin Covey are associated (or correlated) with Steel Connect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Connect has no effect on the direction of Franklin Covey i.e., Franklin Covey and Steel Connect go up and down completely randomly.

Pair Corralation between Franklin Covey and Steel Connect

Allowing for the 90-day total investment horizon Franklin Covey is expected to under-perform the Steel Connect. But the stock apears to be less risky and, when comparing its historical volatility, Franklin Covey is 1.44 times less risky than Steel Connect. The stock trades about -0.03 of its potential returns per unit of risk. The Steel Connect is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,114  in Steel Connect on September 14, 2024 and sell it today you would earn a total of  121.00  from holding Steel Connect or generate 10.86% return on investment over 90 days.

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

Franklin Covey  vs.  Steel Connect

Franklin Covey

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Covey has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Franklin Covey is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Steel Connect

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Steel Connect are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Steel Connect displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Franklin Covey and Steel Connect

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

The idea behind Franklin Covey and Steel Connect 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.