Correlation Between Franklin Wireless and CIMG

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

By analyzing existing cross correlation between Franklin Wireless Corp and CIMG Inc, you can compare the effects of market volatilities on Franklin Wireless and CIMG 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 Wireless with a short position of CIMG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Wireless and CIMG.

Diversification Opportunities for Franklin Wireless and CIMG

-0.53

Correlation Coefficient

Franklin Wireless  CIMG

Excellent diversification

The 3 months correlation between Franklin and CIMG is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Wireless Corp and CIMG Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIMG Inc and Franklin Wireless 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 Wireless Corp are associated (or correlated) with CIMG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIMG Inc has no effect on the direction of Franklin Wireless i.e., Franklin Wireless and CIMG go up and down completely randomly.

Pair Corralation between Franklin Wireless and CIMG

Given the investment horizon of 90 days Franklin Wireless Corp is expected to generate 0.64 times more return on investment than CIMG. However, Franklin Wireless Corp is 1.56 times less risky than CIMG. It trades about 0.19 of its potential returns per unit of risk. CIMG Inc is currently generating about -0.06 per unit of risk. If you would invest  403.00  in Franklin Wireless Corp on December 19, 2024 and sell it today you would earn a total of  170.00  from holding Franklin Wireless Corp or generate 42.18% return on investment over 90 days.

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

Franklin Wireless Corp  vs.  CIMG Inc

Franklin Wireless Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Wireless Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Franklin Wireless disclosed solid returns over the last few months and may actually be approaching a breakup point.

CIMG Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days CIMG Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Franklin Wireless and CIMG

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

The idea behind Franklin Wireless Corp and CIMG Inc 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.