Correlation Between Franklin Wireless and Ziff Davis

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

Diversification Opportunities for Franklin Wireless and Ziff Davis

-0.09

Correlation Coefficient

Franklin Wireless  Ziff Davis

Good diversification

The 3 months correlation between Franklin and Ziff is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Wireless Corp and Ziff Davis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ziff Davis 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 Ziff Davis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ziff Davis has no effect on the direction of Franklin Wireless i.e., Franklin Wireless and Ziff Davis go up and down completely randomly.

Pair Corralation between Franklin Wireless and Ziff Davis

Given the investment horizon of 90 days Franklin Wireless Corp is expected to generate 1.15 times more return on investment than Ziff Davis. However, Franklin Wireless is 1.15 times more volatile than Ziff Davis. It trades about 0.01 of its potential returns per unit of risk. Ziff Davis is currently generating about -0.04 per unit of risk. If you would invest  501.00  in Franklin Wireless Corp on September 29, 2024 and sell it today you would lose (20.00) from holding Franklin Wireless Corp or give up 3.99% of portfolio value over 90 days.

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

Franklin Wireless Corp  vs.  Ziff Davis

Franklin Wireless Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Wireless Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Franklin Wireless is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Ziff Davis

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ziff Davis are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Ziff Davis exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Franklin Wireless and Ziff Davis

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

The idea behind Franklin Wireless Corp and Ziff Davis 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.

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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.