Correlation Between Manhattan Bridge and Franklin BSP

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

By analyzing existing cross correlation between Manhattan Bridge Capital and Franklin BSP Realty, you can compare the effects of market volatilities on Manhattan Bridge and Franklin BSP 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 Manhattan Bridge with a short position of Franklin BSP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manhattan Bridge and Franklin BSP.

Diversification Opportunities for Manhattan Bridge and Franklin BSP

0.01

Correlation Coefficient

Manhattan Bridge  Franklin BSP

Significant diversification

The 3 months correlation between Manhattan and Franklin is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Manhattan Bridge Capital and Franklin BSP Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin BSP Realty and Manhattan Bridge 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 Manhattan Bridge Capital are associated (or correlated) with Franklin BSP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin BSP Realty has no effect on the direction of Manhattan Bridge i.e., Manhattan Bridge and Franklin BSP go up and down completely randomly.

Pair Corralation between Manhattan Bridge and Franklin BSP

Given the investment horizon of 90 days Manhattan Bridge Capital is expected to generate 0.71 times more return on investment than Franklin BSP. However, Manhattan Bridge Capital is 1.42 times less risky than Franklin BSP. It trades about 0.03 of its potential returns per unit of risk. Franklin BSP Realty is currently generating about -0.04 per unit of risk. If you would invest  534.00  in Manhattan Bridge Capital on September 4, 2024 and sell it today you would earn a total of  2.00  from holding Manhattan Bridge Capital or generate 0.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Manhattan Bridge Capital  vs.  Franklin BSP Realty

Manhattan Bridge Capital

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Manhattan Bridge Capital are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Manhattan Bridge is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Franklin BSP Realty

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin BSP Realty are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Franklin BSP is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Manhattan Bridge and Franklin BSP

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

The idea behind Manhattan Bridge Capital and Franklin BSP Realty 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..