Correlation Between Franklin Street and Cyclacel Pharmaceuticals

Can any of the company-specific risk be diversified away by investing in both Franklin Street and Cyclacel Pharmaceuticals 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 Cyclacel Pharmaceuticals 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 Cyclacel Pharmaceuticals, you can compare the effects of market volatilities on Franklin Street and Cyclacel Pharmaceuticals 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 Cyclacel Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Street and Cyclacel Pharmaceuticals.

Diversification Opportunities for Franklin Street and Cyclacel Pharmaceuticals

0.63

Correlation Coefficient

Franklin Street  Cyclacel Pharmaceuticals

Poor diversification

The 3 months correlation between Franklin and Cyclacel is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Street Properties and Cyclacel Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyclacel Pharmaceuticals 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 Cyclacel Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyclacel Pharmaceuticals has no effect on the direction of Franklin Street i.e., Franklin Street and Cyclacel Pharmaceuticals go up and down completely randomly.

Pair Corralation between Franklin Street and Cyclacel Pharmaceuticals

Considering the 90-day investment horizon Franklin Street Properties is expected to generate 0.29 times more return on investment than Cyclacel Pharmaceuticals. However, Franklin Street Properties is 3.46 times less risky than Cyclacel Pharmaceuticals. It trades about -0.13 of its potential returns per unit of risk. Cyclacel Pharmaceuticals is currently generating about -0.08 per unit of risk. If you would invest  221.00  in Franklin Street Properties on January 30, 2024 and sell it today you would lose (21.00) from holding Franklin Street Properties or give up 9.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Franklin Street Properties  vs.  Cyclacel Pharmaceuticals

Franklin Street Prop

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Street Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in May 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Cyclacel Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cyclacel Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Franklin Street and Cyclacel Pharmaceuticals

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

The idea behind Franklin Street Properties and Cyclacel Pharmaceuticals 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.