Correlation Between ZOOZ Power and Franklin Wireless

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

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

Diversification Opportunities for ZOOZ Power and Franklin Wireless

0.5

Correlation Coefficient

ZOOZ Power  Franklin Wireless

Very weak diversification

The 3 months correlation between ZOOZ and Franklin is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding ZOOZ Power Ltd 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 ZOOZ Power 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 ZOOZ Power Ltd 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 ZOOZ Power i.e., ZOOZ Power and Franklin Wireless go up and down completely randomly.

Pair Corralation between ZOOZ Power and Franklin Wireless

Assuming the 90 days horizon ZOOZ Power Ltd is expected to generate 10.07 times more return on investment than Franklin Wireless. However, ZOOZ Power is 10.07 times more volatile than Franklin Wireless Corp. It trades about 0.16 of its potential returns per unit of risk. Franklin Wireless Corp is currently generating about 0.14 per unit of risk. If you would invest  3.11  in ZOOZ Power Ltd on October 25, 2024 and sell it today you would earn a total of  3.14  from holding ZOOZ Power Ltd or generate 100.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.22%
Values	Daily Returns

ZOOZ Power Ltd  vs.  Franklin Wireless Corp

ZOOZ Power

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ZOOZ Power Ltd are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, ZOOZ Power showed solid returns over the last few months and may actually be approaching a breakup point.

Franklin Wireless Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Wireless Corp are ranked lower than 10 (%) 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.

Pair Trading with ZOOZ Power and Franklin Wireless

The main advantage of trading using opposite ZOOZ Power and Franklin Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZOOZ Power 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 ZOOZ Power Ltd 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.