Correlation Between Franklin Credit and Lion One
Can any of the company-specific risk be diversified away by investing in both Franklin Credit and Lion One 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 Lion One 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 Lion One Metals, you can compare the effects of market volatilities on Franklin Credit and Lion One 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Credit and Lion One.
Diversification Opportunities for Franklin Credit and Lion One
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Lion is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Credit Management and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of Franklin Credit i.e., Franklin Credit and Lion One go up and down completely randomly.
Pair Corralation between Franklin Credit and Lion One
Given the investment horizon of 90 days Franklin Credit Management is expected to generate 3.04 times more return on investment than Lion One. However, Franklin Credit is 3.04 times more volatile than Lion One Metals. It trades about 0.04 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.05 per unit of risk. If you would invest 25.00 in Franklin Credit Management on September 25, 2024 and sell it today you would lose (14.00) from holding Franklin Credit Management or give up 56.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Credit Management vs. Lion One Metals
Performance |
Timeline |
Franklin Credit Mana |
Lion One Metals |
Franklin Credit and Lion One Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Credit and Lion One
The main advantage of trading using opposite Franklin Credit and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Credit position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One's long position.Franklin Credit vs. Citizens Financial Corp | Franklin Credit vs. Farmers Bancorp | Franklin Credit vs. Alpine Banks of | Franklin Credit vs. Taylor Calvin B |
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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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