Correlation Between Franklin Equity and Credit Suisse

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

By analyzing existing cross correlation between Franklin Equity Income and Credit Suisse Floating, you can compare the effects of market volatilities on Franklin Equity and Credit Suisse 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 Equity with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Equity and Credit Suisse.

Diversification Opportunities for Franklin Equity and Credit Suisse

0.95

Correlation Coefficient

Franklin Equity  Credit Suisse

Almost no diversification

The 3 months correlation between Franklin and Credit is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Equity Income and Credit Suisse Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Floating and Franklin Equity 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 Equity Income are associated (or correlated) with Credit Suisse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Suisse Floating has no effect on the direction of Franklin Equity i.e., Franklin Equity and Credit Suisse go up and down completely randomly.

Pair Corralation between Franklin Equity and Credit Suisse

Assuming the 90 days horizon Franklin Equity Income is expected to generate 3.26 times more return on investment than Credit Suisse. However, Franklin Equity is 3.26 times more volatile than Credit Suisse Floating. It trades about 0.31 of its potential returns per unit of risk. Credit Suisse Floating is currently generating about 0.23 per unit of risk. If you would invest  3,146  in Franklin Equity Income on May 25, 2025 and sell it today you would earn a total of  327.00  from holding Franklin Equity Income or generate 10.39% return on investment over 90 days.

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

Franklin Equity Income  vs.  Credit Suisse Floating

Franklin Equity Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Equity Income are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Franklin Equity may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Credit Suisse Floating

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Suisse Floating are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Credit Suisse is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Franklin Equity and Credit Suisse

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

The idea behind Franklin Equity Income and Credit Suisse Floating 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..