Correlation Between Knowles Cor and Franklin Wireless

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Can any of the company-specific risk be diversified away by investing in both Knowles Cor and Franklin Wireless 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 Knowles Cor and Franklin Wireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knowles Cor and Franklin Wireless Corp, you can compare the effects of market volatilities on Knowles Cor and Franklin Wireless 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 Knowles Cor with a short position of Franklin Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knowles Cor and Franklin Wireless.

Diversification Opportunities for Knowles Cor and Franklin Wireless

KnowlesFranklinDiversified AwayKnowlesFranklinDiversified Away100%
-0.11
  Correlation Coefficient

Good diversification

The 3 months correlation between Knowles and Franklin is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Knowles Cor and Franklin Wireless Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Wireless Corp and Knowles Cor 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 Knowles Cor are associated (or correlated) with Franklin Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Wireless Corp has no effect on the direction of Knowles Cor i.e., Knowles Cor and Franklin Wireless go up and down completely randomly.

Pair Corralation between Knowles Cor and Franklin Wireless

Allowing for the 90-day total investment horizon Knowles Cor is expected to generate 28.1 times less return on investment than Franklin Wireless. But when comparing it to its historical volatility, Knowles Cor is 1.8 times less risky than Franklin Wireless. It trades about 0.02 of its potential returns per unit of risk. Franklin Wireless Corp is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  413.00  in Franklin Wireless Corp on November 19, 2024 and sell it today you would earn a total of  208.00  from holding Franklin Wireless Corp or generate 50.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Knowles Cor  vs.  Franklin Wireless Corp

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -50510152025
JavaScript chart by amCharts 3.21.15KN FKWL
       Timeline  
Knowles Cor 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Knowles Cor are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Knowles Cor is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1718192021
Franklin Wireless Corp 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Wireless Corp are ranked lower than 20 (%) 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.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb44.555.56

Knowles Cor and Franklin Wireless Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.47-1.86-1.26-0.65-0.05150.521.111.72.292.88 0.060.080.100.120.140.16
JavaScript chart by amCharts 3.21.15KN FKWL
       Returns  

Pair Trading with Knowles Cor and Franklin Wireless

The main advantage of trading using opposite Knowles Cor and Franklin Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knowles Cor position performs unexpectedly, Franklin Wireless 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 Franklin Wireless will offset losses from the drop in Franklin Wireless' long position.
The idea behind Knowles Cor and Franklin Wireless Corp 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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