Correlation Between Franklin Wireless and Live Ventures

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

Diversification Opportunities for Franklin Wireless and Live Ventures

-0.21

Correlation Coefficient

Franklin Wireless  Live Ventures

Very good diversification

The 3 months correlation between Franklin and Live is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Wireless Corp and Live Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Ventures 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 Live Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Ventures has no effect on the direction of Franklin Wireless i.e., Franklin Wireless and Live Ventures go up and down completely randomly.

Pair Corralation between Franklin Wireless and Live Ventures

Given the investment horizon of 90 days Franklin Wireless Corp is expected to generate 0.75 times more return on investment than Live Ventures. However, Franklin Wireless Corp is 1.34 times less risky than Live Ventures. It trades about 0.22 of its potential returns per unit of risk. Live Ventures is currently generating about 0.05 per unit of risk. If you would invest  438.00  in Franklin Wireless Corp on October 11, 2024 and sell it today you would earn a total of  56.00  from holding Franklin Wireless Corp or generate 12.79% return on investment over 90 days.

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

Franklin Wireless Corp  vs.  Live Ventures

Franklin Wireless Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Wireless Corp are ranked lower than 8 (%) 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.

Live Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Live Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Franklin Wireless and Live Ventures

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

The idea behind Franklin Wireless Corp and Live Ventures 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.