Correlation Between Mid-Atlantic Home and Franklin Street

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

By analyzing existing cross correlation between Mid Atlantic Home Health and Franklin Street Properties, you can compare the effects of market volatilities on Mid-Atlantic Home and Franklin Street 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 Mid-Atlantic Home with a short position of Franklin Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid-Atlantic Home and Franklin Street.

Diversification Opportunities for Mid-Atlantic Home and Franklin Street

0.0

Correlation Coefficient

Mid-Atlantic Home  Franklin Street

Pay attention - limited upside

The 3 months correlation between Mid-Atlantic and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mid Atlantic Home Health and Franklin Street Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Street Prop and Mid-Atlantic Home 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 Mid Atlantic Home Health are associated (or correlated) with Franklin Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Street Prop has no effect on the direction of Mid-Atlantic Home i.e., Mid-Atlantic Home and Franklin Street go up and down completely randomly.

Pair Corralation between Mid-Atlantic Home and Franklin Street

If you would invest  187.00  in Franklin Street Properties on December 27, 2024 and sell it today you would lose (1.00) from holding Franklin Street Properties or give up 0.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Mid Atlantic Home Health  vs.  Franklin Street Properties

Mid Atlantic Home

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mid Atlantic Home Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, Mid-Atlantic Home is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Franklin Street Prop

Risk-Adjusted Performance

Very Weak

Over the last 90 days Franklin Street Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Franklin Street is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Mid-Atlantic Home and Franklin Street

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

The idea behind Mid Atlantic Home Health and Franklin Street Properties 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 Commodity Directory module to find actively traded commodities issued by global exchanges.