Correlation Between Franklin Credit and Safety Shot

Can any of the company-specific risk be diversified away by investing in both Franklin Credit and Safety Shot 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 Safety Shot 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 Safety Shot, you can compare the effects of market volatilities on Franklin Credit and Safety Shot 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 Safety Shot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Credit and Safety Shot.

Diversification Opportunities for Franklin Credit and Safety Shot

-0.45

Correlation Coefficient

Franklin Credit  Safety Shot

Very good diversification

The 3 months correlation between Franklin and Safety is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Credit Management and Safety Shot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Shot 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 Safety Shot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Shot has no effect on the direction of Franklin Credit i.e., Franklin Credit and Safety Shot go up and down completely randomly.

Pair Corralation between Franklin Credit and Safety Shot

Given the investment horizon of 90 days Franklin Credit is expected to generate 4.09 times less return on investment than Safety Shot. But when comparing it to its historical volatility, Franklin Credit Management is 1.81 times less risky than Safety Shot. It trades about 0.04 of its potential returns per unit of risk. Safety Shot is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  39.00  in Safety Shot on September 26, 2024 and sell it today you would lose (22.00) from holding Safety Shot or give up 56.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	63.51%
Values	Daily Returns

Franklin Credit Management  vs.  Safety Shot

Franklin Credit Mana

Risk-Adjusted Performance

4 of 100

Insignificant

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

Safety Shot

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Safety Shot are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Safety Shot showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Franklin Credit and Safety Shot

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

The idea behind Franklin Credit Management and Safety Shot 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.