Correlation Between Franklin Covey and Willdan

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

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

Diversification Opportunities for Franklin Covey and Willdan

0.05

Correlation Coefficient

Franklin Covey  Willdan

Significant diversification

The 3 months correlation between Franklin and Willdan is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Covey and Willdan Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willdan Group 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 Willdan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willdan Group has no effect on the direction of Franklin Covey i.e., Franklin Covey and Willdan go up and down completely randomly.

Pair Corralation between Franklin Covey and Willdan

Allowing for the 90-day total investment horizon Franklin Covey is expected to under-perform the Willdan. But the stock apears to be less risky and, when comparing its historical volatility, Franklin Covey is 1.75 times less risky than Willdan. The stock trades about -0.15 of its potential returns per unit of risk. The Willdan Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,847  in Willdan Group on December 21, 2024 and sell it today you would earn a total of  459.00  from holding Willdan Group or generate 11.93% return on investment over 90 days.

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

Franklin Covey  vs.  Willdan Group

Franklin Covey

Risk-Adjusted Performance

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 inconsistent performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Willdan Group

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Franklin Covey and Willdan

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

The idea behind Franklin Covey and Willdan Group 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 Transaction History module to view history of all your transactions and understand their impact on performance.