Correlation Between Franklin Credit and INGERSOLL

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

Diversification Opportunities for Franklin Credit and INGERSOLL

0.03

Correlation Coefficient

Franklin Credit  INGERSOLL

Significant diversification

The 3 months correlation between Franklin and INGERSOLL is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Credit Management and INGERSOLL RAND LUXEMBOURG FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INGERSOLL RAND LUXEM 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 INGERSOLL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INGERSOLL RAND LUXEM has no effect on the direction of Franklin Credit i.e., Franklin Credit and INGERSOLL go up and down completely randomly.

Pair Corralation between Franklin Credit and INGERSOLL

If you would invest  8,841  in INGERSOLL RAND LUXEMBOURG FIN on October 6, 2024 and sell it today you would earn a total of  111.00  from holding INGERSOLL RAND LUXEMBOURG FIN or generate 1.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	10.0%
Values	Daily Returns

Franklin Credit Management  vs.  INGERSOLL RAND LUXEMBOURG FIN

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 uncertain basic indicators, Franklin Credit displayed solid returns over the last few months and may actually be approaching a breakup point.

INGERSOLL RAND LUXEM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INGERSOLL RAND LUXEMBOURG FIN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for INGERSOLL RAND LUXEMBOURG FIN investors.

Pair Trading with Franklin Credit and INGERSOLL

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

The idea behind Franklin Credit Management and INGERSOLL RAND LUXEMBOURG FIN 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..