Correlation Between Franchise and Mega Uranium

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

By analyzing existing cross correlation between Franchise Group and Mega Uranium, you can compare the effects of market volatilities on Franchise and Mega Uranium 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 Franchise with a short position of Mega Uranium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franchise and Mega Uranium.

Diversification Opportunities for Franchise and Mega Uranium

-0.3

Correlation Coefficient

Franchise  Mega Uranium

Very good diversification

The 3 months correlation between Franchise and Mega is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Franchise Group and Mega Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mega Uranium and Franchise 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 Franchise Group are associated (or correlated) with Mega Uranium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mega Uranium has no effect on the direction of Franchise i.e., Franchise and Mega Uranium go up and down completely randomly.

Pair Corralation between Franchise and Mega Uranium

If you would invest  22.00  in Mega Uranium on September 29, 2024 and sell it today you would earn a total of  1.00  from holding Mega Uranium or generate 4.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.79%
Values	Daily Returns

Franchise Group  vs.  Mega Uranium

Franchise Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franchise Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Franchise is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Mega Uranium

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mega Uranium are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Mega Uranium is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Franchise and Mega Uranium

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

The idea behind Franchise Group and Mega Uranium 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.