Correlation Between Franklin Credit and ChargePoint Holdings

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

Diversification Opportunities for Franklin Credit and ChargePoint Holdings

-0.36
  Correlation Coefficient

Very good diversification

The 3 months correlation between Franklin and ChargePoint is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Credit Management and ChargePoint Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChargePoint Holdings and Franklin Credit 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 Franklin Credit Management are associated (or correlated) with ChargePoint Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChargePoint Holdings has no effect on the direction of Franklin Credit i.e., Franklin Credit and ChargePoint Holdings go up and down completely randomly.

Pair Corralation between Franklin Credit and ChargePoint Holdings

If you would invest  11.00  in Franklin Credit Management on September 24, 2024 and sell it today you would earn a total of  0.00  from holding Franklin Credit Management or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

Franklin Credit Management  vs.  ChargePoint Holdings

 Performance 
       Timeline  
Franklin Credit Mana 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Credit Management are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Franklin Credit displayed solid returns over the last few months and may actually be approaching a breakup point.
ChargePoint Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ChargePoint Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Franklin Credit and ChargePoint Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Franklin Credit and ChargePoint Holdings

The main advantage of trading using opposite Franklin Credit and ChargePoint Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Credit position performs unexpectedly, ChargePoint Holdings 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 ChargePoint Holdings will offset losses from the drop in ChargePoint Holdings' long position.
The idea behind Franklin Credit Management and ChargePoint Holdings 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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