Correlation Between Franklin Wireless and 90331HPL1

Can any of the company-specific risk be diversified away by investing in both Franklin Wireless and 90331HPL1 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 90331HPL1 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 US BANK NATIONAL, you can compare the effects of market volatilities on Franklin Wireless and 90331HPL1 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 90331HPL1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Wireless and 90331HPL1.

Diversification Opportunities for Franklin Wireless and 90331HPL1

-0.56

Correlation Coefficient

Franklin Wireless  90331HPL1

Excellent diversification

The 3 months correlation between Franklin and 90331HPL1 is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Wireless Corp and US BANK NATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US BANK NATIONAL 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 90331HPL1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US BANK NATIONAL has no effect on the direction of Franklin Wireless i.e., Franklin Wireless and 90331HPL1 go up and down completely randomly.

Pair Corralation between Franklin Wireless and 90331HPL1

Given the investment horizon of 90 days Franklin Wireless is expected to generate 313.24 times less return on investment than 90331HPL1. But when comparing it to its historical volatility, Franklin Wireless Corp is 41.3 times less risky than 90331HPL1. It trades about 0.01 of its potential returns per unit of risk. US BANK NATIONAL is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  9,526  in US BANK NATIONAL on October 26, 2024 and sell it today you would earn a total of  21.00  from holding US BANK NATIONAL or generate 0.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	62.35%
Values	Daily Returns

Franklin Wireless Corp  vs.  US BANK NATIONAL

Franklin Wireless Corp

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Wireless Corp are ranked lower than 11 (%) 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.

US BANK NATIONAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US BANK NATIONAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent 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 US BANK NATIONAL investors.

Pair Trading with Franklin Wireless and 90331HPL1

The main advantage of trading using opposite Franklin Wireless and 90331HPL1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Wireless position performs unexpectedly, 90331HPL1 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 90331HPL1 will offset losses from the drop in 90331HPL1's long position.

The idea behind Franklin Wireless Corp and US BANK NATIONAL 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.