Correlation Between Franklin North and Apple

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

Diversification Opportunities for Franklin North and Apple

-0.7
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Franklin and Apple is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding FRANKLIN NORTH CAROLINA and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Franklin North 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 North Carolina are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Franklin North i.e., Franklin North and Apple go up and down completely randomly.

Pair Corralation between Franklin North and Apple

Assuming the 90 days horizon Franklin North is expected to generate 10.9 times less return on investment than Apple. But when comparing it to its historical volatility, Franklin North Carolina is 5.87 times less risky than Apple. It trades about 0.01 of its potential returns per unit of risk. Apple Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  16,817  in Apple Inc on December 29, 2023 and sell it today you would earn a total of  514.00  from holding Apple Inc or generate 3.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy99.8%
ValuesDaily Returns

FRANKLIN NORTH CAROLINA  vs.  Apple Inc

 Performance 
       Timeline  
Franklin North Carolina 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Franklin North Carolina has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Franklin North is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Apple Inc 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Franklin North and Apple Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Franklin North and Apple

The main advantage of trading using opposite Franklin North and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin North position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.
The idea behind Franklin North Carolina and Apple Inc 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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