Correlation Between Kibush Capital and Franklin Resources

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

Diversification Opportunities for Kibush Capital and Franklin Resources

-0.02
  Correlation Coefficient

Good diversification

The 3 months correlation between Kibush and Franklin is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kibush Capital Corp and Franklin Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Resources and Kibush Capital 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 Kibush Capital Corp are associated (or correlated) with Franklin Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Resources has no effect on the direction of Kibush Capital i.e., Kibush Capital and Franklin Resources go up and down completely randomly.

Pair Corralation between Kibush Capital and Franklin Resources

Given the investment horizon of 90 days Kibush Capital is expected to generate 1.4 times less return on investment than Franklin Resources. In addition to that, Kibush Capital is 6.21 times more volatile than Franklin Resources. It trades about 0.02 of its total potential returns per unit of risk. Franklin Resources is currently generating about 0.16 per unit of volatility. If you would invest  2,244  in Franklin Resources on September 2, 2022 and sell it today you would earn a total of  484.00  from holding Franklin Resources or generate 21.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy97.67%
ValuesDaily Returns

Kibush Capital Corp  vs.  Franklin Resources

 Performance (%) 
       Timeline  
Kibush Capital Corp 
Kibush Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Kibush Capital Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain fundamental indicators, Kibush Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Kibush Price Channel

Franklin Resources 
Franklin Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain technical and fundamental indicators, Franklin Resources may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Franklin Price Channel

Kibush Capital and Franklin Resources Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kibush Capital and Franklin Resources

The main advantage of trading using opposite Kibush Capital and Franklin Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kibush Capital position performs unexpectedly, Franklin Resources 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 Resources will offset losses from the drop in Franklin Resources' long position.
Kibush Capital vs. Microsoft
The idea behind Kibush Capital Corp and Franklin Resources 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.
Franklin Resources vs. Caterpillar
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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