Correlation Between Franklin Street and Tigo Energy
Can any of the company-specific risk be diversified away by investing in both Franklin Street and Tigo Energy 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 Street and Tigo Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Street Properties and Tigo Energy, you can compare the effects of market volatilities on Franklin Street and Tigo Energy 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 Street with a short position of Tigo Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Street and Tigo Energy.
Diversification Opportunities for Franklin Street and Tigo Energy
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and Tigo is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Street Properties and Tigo Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tigo Energy and Franklin Street 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 Street Properties are associated (or correlated) with Tigo Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tigo Energy has no effect on the direction of Franklin Street i.e., Franklin Street and Tigo Energy go up and down completely randomly.
Pair Corralation between Franklin Street and Tigo Energy
Considering the 90-day investment horizon Franklin Street Properties is expected to under-perform the Tigo Energy. But the stock apears to be less risky and, when comparing its historical volatility, Franklin Street Properties is 1.74 times less risky than Tigo Energy. The stock trades about 0.0 of its potential returns per unit of risk. The Tigo Energy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 93.00 in Tigo Energy on September 23, 2024 and sell it today you would earn a total of 1.00 from holding Tigo Energy or generate 1.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Street Properties vs. Tigo Energy
Performance |
Timeline |
Franklin Street Prop |
Tigo Energy |
Franklin Street and Tigo Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Street and Tigo Energy
The main advantage of trading using opposite Franklin Street and Tigo Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Street position performs unexpectedly, Tigo Energy 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 Tigo Energy will offset losses from the drop in Tigo Energy's long position.Franklin Street vs. Cousins Properties Incorporated | Franklin Street vs. Creative Media Community | Franklin Street vs. Highwoods Properties | Franklin Street vs. Douglas Emmett |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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