Correlation Between Franklin Credit and ZenaTech

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

Diversification Opportunities for Franklin Credit and ZenaTech

-0.03

Correlation Coefficient

Franklin Credit  ZenaTech

Good diversification

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

Pair Corralation between Franklin Credit and ZenaTech

Given the investment horizon of 90 days Franklin Credit is expected to generate 29.54 times less return on investment than ZenaTech. But when comparing it to its historical volatility, Franklin Credit Management is 27.4 times less risky than ZenaTech. It trades about 0.16 of its potential returns per unit of risk. ZenaTech is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  198.00  in ZenaTech on October 9, 2024 and sell it today you would earn a total of  507.00  from holding ZenaTech or generate 256.06% return on investment over 90 days.

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

Franklin Credit Management  vs.  ZenaTech

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.

ZenaTech

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ZenaTech are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ZenaTech sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Franklin Credit and ZenaTech

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

The idea behind Franklin Credit Management and ZenaTech 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.