Correlation Between Franklin Wireless and Desktop Metal
Can any of the company-specific risk be diversified away by investing in both Franklin Wireless and Desktop Metal 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 Wireless and Desktop Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Wireless Corp and Desktop Metal, you can compare the effects of market volatilities on Franklin Wireless and Desktop Metal 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 Wireless with a short position of Desktop Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Wireless and Desktop Metal.
Diversification Opportunities for Franklin Wireless and Desktop Metal
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Desktop is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Wireless Corp and Desktop Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desktop Metal and Franklin Wireless 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 Wireless Corp are associated (or correlated) with Desktop Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Desktop Metal has no effect on the direction of Franklin Wireless i.e., Franklin Wireless and Desktop Metal go up and down completely randomly.
Pair Corralation between Franklin Wireless and Desktop Metal
Given the investment horizon of 90 days Franklin Wireless Corp is expected to generate 0.55 times more return on investment than Desktop Metal. However, Franklin Wireless Corp is 1.82 times less risky than Desktop Metal. It trades about 0.1 of its potential returns per unit of risk. Desktop Metal is currently generating about -0.55 per unit of risk. If you would invest 430.00 in Franklin Wireless Corp on September 25, 2024 and sell it today you would earn a total of 21.00 from holding Franklin Wireless Corp or generate 4.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Wireless Corp vs. Desktop Metal
Performance |
Timeline |
Franklin Wireless Corp |
Desktop Metal |
Franklin Wireless and Desktop Metal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Wireless and Desktop Metal
The main advantage of trading using opposite Franklin Wireless and Desktop Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Wireless position performs unexpectedly, Desktop Metal 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 Desktop Metal will offset losses from the drop in Desktop Metal's long position.Franklin Wireless vs. Desktop Metal | Franklin Wireless vs. Fabrinet | Franklin Wireless vs. Kimball Electronics | Franklin Wireless vs. Knowles Cor |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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