Correlation Between Franklin Wireless and Weibo Corp
Can any of the company-specific risk be diversified away by investing in both Franklin Wireless and Weibo Corp 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 Weibo Corp 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 Weibo Corp, you can compare the effects of market volatilities on Franklin Wireless and Weibo Corp 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 Weibo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Wireless and Weibo Corp.
Diversification Opportunities for Franklin Wireless and Weibo Corp
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Weibo is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Wireless Corp and Weibo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weibo Corp 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 Weibo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weibo Corp has no effect on the direction of Franklin Wireless i.e., Franklin Wireless and Weibo Corp go up and down completely randomly.
Pair Corralation between Franklin Wireless and Weibo Corp
Given the investment horizon of 90 days Franklin Wireless Corp is expected to generate 1.17 times more return on investment than Weibo Corp. However, Franklin Wireless is 1.17 times more volatile than Weibo Corp. It trades about 0.26 of its potential returns per unit of risk. Weibo Corp is currently generating about 0.03 per unit of risk. If you would invest 431.00 in Franklin Wireless Corp on December 4, 2024 and sell it today you would earn a total of 261.00 from holding Franklin Wireless Corp or generate 60.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Wireless Corp vs. Weibo Corp
Performance |
Timeline |
Franklin Wireless Corp |
Weibo Corp |
Franklin Wireless and Weibo Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Wireless and Weibo Corp
The main advantage of trading using opposite Franklin Wireless and Weibo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Wireless position performs unexpectedly, Weibo Corp 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 Weibo Corp will offset losses from the drop in Weibo Corp's long position.Franklin Wireless vs. KVH Industries | Franklin Wireless vs. Telesat Corp | Franklin Wireless vs. Digi International | Franklin Wireless vs. Comtech Telecommunications Corp |
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Check out your portfolio center.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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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