Correlation Between Frequency Electronics and Franklin Wireless
Can any of the company-specific risk be diversified away by investing in both Frequency Electronics 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 Frequency Electronics and Franklin Wireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frequency Electronics and Franklin Wireless Corp, you can compare the effects of market volatilities on Frequency Electronics 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 Frequency Electronics with a short position of Franklin Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frequency Electronics and Franklin Wireless.
Diversification Opportunities for Frequency Electronics and Franklin Wireless
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Frequency and Franklin is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Frequency Electronics 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 Frequency Electronics 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 Frequency Electronics 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 Frequency Electronics i.e., Frequency Electronics and Franklin Wireless go up and down completely randomly.
Pair Corralation between Frequency Electronics and Franklin Wireless
Given the investment horizon of 90 days Frequency Electronics is expected to under-perform the Franklin Wireless. But the stock apears to be less risky and, when comparing its historical volatility, Frequency Electronics is 1.29 times less risky than Franklin Wireless. The stock trades about -0.15 of its potential returns per unit of risk. The Franklin Wireless Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 297.00 in Franklin Wireless Corp on January 20, 2024 and sell it today you would lose (4.00) from holding Franklin Wireless Corp or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frequency Electronics vs. Franklin Wireless Corp
Performance |
| Timeline |
| Frequency Electronics |
| Franklin Wireless Corp |
Frequency Electronics and Franklin Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frequency Electronics and Franklin Wireless
The main advantage of trading using opposite Frequency Electronics and Franklin Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frequency Electronics 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.| Frequency Electronics vs. Maximus | Frequency Electronics vs. Network 1 Technologies | Frequency Electronics vs. First Advantage Corp | Frequency Electronics vs. BrightView Holdings |
| Franklin Wireless vs. Wialan Technologies | Franklin Wireless vs. TPT Global Tech | Franklin Wireless vs. Moving iMage Technologies | Franklin Wireless vs. Comtech Telecommunications Corp |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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