Correlation Between Sable Offshore and Franklin Wireless

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

By analyzing existing cross correlation between Sable Offshore Corp and Franklin Wireless Corp, you can compare the effects of market volatilities on Sable Offshore 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 Sable Offshore with a short position of Franklin Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sable Offshore and Franklin Wireless.

Diversification Opportunities for Sable Offshore and Franklin Wireless

0.07

Correlation Coefficient

Sable Offshore  Franklin Wireless

Significant diversification

The 3 months correlation between Sable and Franklin is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp 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 Sable Offshore 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 Sable Offshore Corp 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 Sable Offshore i.e., Sable Offshore and Franklin Wireless go up and down completely randomly.

Pair Corralation between Sable Offshore and Franklin Wireless

Considering the 90-day investment horizon Sable Offshore Corp is expected to generate 3.21 times more return on investment than Franklin Wireless. However, Sable Offshore is 3.21 times more volatile than Franklin Wireless Corp. It trades about 0.03 of its potential returns per unit of risk. Franklin Wireless Corp is currently generating about 0.11 per unit of risk. If you would invest  2,065  in Sable Offshore Corp on September 16, 2024 and sell it today you would earn a total of  23.00  from holding Sable Offshore Corp or generate 1.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sable Offshore Corp  vs.  Franklin Wireless Corp

Sable Offshore Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sable Offshore Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Franklin Wireless Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Wireless Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Franklin Wireless is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Sable Offshore and Franklin Wireless

The main advantage of trading using opposite Sable Offshore and Franklin Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sable Offshore 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 Sable Offshore Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.