Correlation Between Global E and Franklin Wireless

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

Diversification Opportunities for Global E and Franklin Wireless

-0.21
  Correlation Coefficient

Very good diversification

The 3 months correlation between Global and Franklin is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Global E Online and Franklin Wireless Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Wireless Corp and Global E 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 Global E Online are associated (or correlated) with Franklin Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Wireless Corp has no effect on the direction of Global E i.e., Global E and Franklin Wireless go up and down completely randomly.

Pair Corralation between Global E and Franklin Wireless

Given the investment horizon of 90 days Global E Online is expected to generate 1.26 times more return on investment than Franklin Wireless. However, Global E is 1.26 times more volatile than Franklin Wireless Corp. It trades about 0.26 of its potential returns per unit of risk. Franklin Wireless Corp is currently generating about 0.01 per unit of risk. If you would invest  3,734  in Global E Online on September 25, 2024 and sell it today you would earn a total of  1,730  from holding Global E Online or generate 46.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Global E Online  vs.  Franklin Wireless Corp

 Performance 
       Timeline  
Global E Online 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Global E Online are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental drivers, Global E exhibited solid returns over the last few months and may actually be approaching a breakup point.
Franklin Wireless Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Franklin Wireless Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Franklin Wireless is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Global E and Franklin Wireless Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Global E and Franklin Wireless

The main advantage of trading using opposite Global E and Franklin Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global E position performs unexpectedly, Franklin Wireless 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 Franklin Wireless will offset losses from the drop in Franklin Wireless' long position.
The idea behind Global E Online and Franklin Wireless Corp 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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