Correlation Between Resources Connection and Franklin Covey

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

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

Diversification Opportunities for Resources Connection and Franklin Covey

0.91

Correlation Coefficient

Resources Connection  Franklin Covey

Almost no diversification

The 3 months correlation between Resources and Franklin is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Resources Connection and Franklin Covey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Covey and Resources Connection 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 Resources Connection are associated (or correlated) with Franklin Covey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Covey has no effect on the direction of Resources Connection i.e., Resources Connection and Franklin Covey go up and down completely randomly.

Pair Corralation between Resources Connection and Franklin Covey

Considering the 90-day investment horizon Resources Connection is expected to under-perform the Franklin Covey. But the stock apears to be less risky and, when comparing its historical volatility, Resources Connection is 1.23 times less risky than Franklin Covey. The stock trades about -0.17 of its potential returns per unit of risk. The Franklin Covey is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest  3,125  in Franklin Covey on January 10, 2025 and sell it today you would lose (1,018) from holding Franklin Covey or give up 32.58% of portfolio value over 90 days.

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

Resources Connection  vs.  Franklin Covey

Resources Connection

Risk-Adjusted Performance

Very Weak

Over the last 90 days Resources Connection has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in May 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Franklin Covey

Risk-Adjusted Performance

Very Weak

Over the last 90 days Franklin Covey has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in May 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Resources Connection and Franklin Covey

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

The idea behind Resources Connection and Franklin Covey 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.