Correlation Between Franklin Street and KIMBERLY

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

By analyzing existing cross correlation between Franklin Street Properties and KIMBERLY CLARK P, you can compare the effects of market volatilities on Franklin Street and KIMBERLY 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 Street with a short position of KIMBERLY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Street and KIMBERLY.

Diversification Opportunities for Franklin Street and KIMBERLY

-0.38

Correlation Coefficient

Franklin Street  KIMBERLY

Very good diversification

The 3 months correlation between Franklin and KIMBERLY is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Street Properties and KIMBERLY CLARK P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMBERLY CLARK P and Franklin Street 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 Street Properties are associated (or correlated) with KIMBERLY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIMBERLY CLARK P has no effect on the direction of Franklin Street i.e., Franklin Street and KIMBERLY go up and down completely randomly.

Pair Corralation between Franklin Street and KIMBERLY

Considering the 90-day investment horizon Franklin Street Properties is expected to generate 2.3 times more return on investment than KIMBERLY. However, Franklin Street is 2.3 times more volatile than KIMBERLY CLARK P. It trades about 0.09 of its potential returns per unit of risk. KIMBERLY CLARK P is currently generating about -0.25 per unit of risk. If you would invest  173.00  in Franklin Street Properties on September 17, 2024 and sell it today you would earn a total of  28.00  from holding Franklin Street Properties or generate 16.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	52.31%
Values	Daily Returns

Franklin Street Properties  vs.  KIMBERLY CLARK P

Franklin Street Prop

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Street Properties are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Franklin Street reported solid returns over the last few months and may actually be approaching a breakup point.

KIMBERLY CLARK P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KIMBERLY CLARK P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for KIMBERLY CLARK P investors.

Pair Trading with Franklin Street and KIMBERLY

The main advantage of trading using opposite Franklin Street and KIMBERLY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Street position performs unexpectedly, KIMBERLY 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 KIMBERLY will offset losses from the drop in KIMBERLY's long position.

The idea behind Franklin Street Properties and KIMBERLY CLARK P 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.