Correlation Between Franklin Credit and Getty Copper
Can any of the company-specific risk be diversified away by investing in both Franklin Credit and Getty Copper 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 Credit and Getty Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Credit Management and Getty Copper, you can compare the effects of market volatilities on Franklin Credit and Getty Copper 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 Credit with a short position of Getty Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Credit and Getty Copper.
Diversification Opportunities for Franklin Credit and Getty Copper
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Getty is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Credit Management and Getty Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Copper and Franklin Credit 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 Credit Management are associated (or correlated) with Getty Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Copper has no effect on the direction of Franklin Credit i.e., Franklin Credit and Getty Copper go up and down completely randomly.
Pair Corralation between Franklin Credit and Getty Copper
Given the investment horizon of 90 days Franklin Credit Management is expected to under-perform the Getty Copper. In addition to that, Franklin Credit is 1.04 times more volatile than Getty Copper. It trades about -0.22 of its total potential returns per unit of risk. Getty Copper is currently generating about -0.21 per unit of volatility. If you would invest 4.88 in Getty Copper on December 5, 2024 and sell it today you would lose (2.88) from holding Getty Copper or give up 59.02% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Franklin Credit Management vs. Getty Copper
Performance |
Timeline |
Franklin Credit Mana |
Getty Copper |
Franklin Credit and Getty Copper Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Credit and Getty Copper
The main advantage of trading using opposite Franklin Credit and Getty Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Credit position performs unexpectedly, Getty Copper 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 Getty Copper will offset losses from the drop in Getty Copper's long position.Franklin Credit vs. Global Healthcare REIT | Franklin Credit vs. Freedom Bank of | Franklin Credit vs. Hinto Energy | Franklin Credit vs. Ensurge |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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