Correlation Between Franklin Credit and Summit Materials
Can any of the company-specific risk be diversified away by investing in both Franklin Credit and Summit Materials 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 Summit Materials 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 Summit Materials, you can compare the effects of market volatilities on Franklin Credit and Summit Materials 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 Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Credit and Summit Materials.
Diversification Opportunities for Franklin Credit and Summit Materials
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Summit is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Credit Management and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials 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 Summit Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Materials has no effect on the direction of Franklin Credit i.e., Franklin Credit and Summit Materials go up and down completely randomly.
Pair Corralation between Franklin Credit and Summit Materials
Given the investment horizon of 90 days Franklin Credit is expected to generate 1.86 times less return on investment than Summit Materials. In addition to that, Franklin Credit is 2.12 times more volatile than Summit Materials. It trades about 0.06 of its total potential returns per unit of risk. Summit Materials is currently generating about 0.23 per unit of volatility. If you would invest 3,859 in Summit Materials on September 25, 2024 and sell it today you would earn a total of 1,191 from holding Summit Materials or generate 30.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Credit Management vs. Summit Materials
Performance |
Timeline |
Franklin Credit Mana |
Summit Materials |
Franklin Credit and Summit Materials Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Credit and Summit Materials
The main advantage of trading using opposite Franklin Credit and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Credit position performs unexpectedly, Summit Materials 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 Summit Materials will offset losses from the drop in Summit Materials' 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 |
Summit Materials vs. Martin Marietta Materials | Summit Materials vs. United States Lime | Summit Materials vs. James Hardie Industries | Summit Materials vs. The Monarch Cement |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |