Correlation Between Franklin Wireless and LightPath Technologies
Can any of the company-specific risk be diversified away by investing in both Franklin Wireless and LightPath Technologies 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 Wireless and LightPath Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Wireless Corp and LightPath Technologies, you can compare the effects of market volatilities on Franklin Wireless and LightPath Technologies 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 Wireless with a short position of LightPath Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Wireless and LightPath Technologies.
Diversification Opportunities for Franklin Wireless and LightPath Technologies
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and LightPath is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Wireless Corp and LightPath Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LightPath Technologies and Franklin Wireless 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 Wireless Corp are associated (or correlated) with LightPath Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LightPath Technologies has no effect on the direction of Franklin Wireless i.e., Franklin Wireless and LightPath Technologies go up and down completely randomly.
Pair Corralation between Franklin Wireless and LightPath Technologies
Given the investment horizon of 90 days Franklin Wireless is expected to generate 37.97 times less return on investment than LightPath Technologies. But when comparing it to its historical volatility, Franklin Wireless Corp is 2.79 times less risky than LightPath Technologies. It trades about 0.02 of its potential returns per unit of risk. LightPath Technologies is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 287.00 in LightPath Technologies on June 11, 2025 and sell it today you would earn a total of 244.00 from holding LightPath Technologies or generate 85.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Wireless Corp vs. LightPath Technologies
Performance |
| Timeline |
| Franklin Wireless Corp |
| LightPath Technologies |
Franklin Wireless and LightPath Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Wireless and LightPath Technologies
The main advantage of trading using opposite Franklin Wireless and LightPath Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Wireless position performs unexpectedly, LightPath Technologies 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 LightPath Technologies will offset losses from the drop in LightPath Technologies' long position.| Franklin Wireless vs. BeWhere Holdings | Franklin Wireless vs. Collplant Biotechnologies | Franklin Wireless vs. Crexendo | Franklin Wireless vs. Electronic Systems Technology |
| LightPath Technologies vs. Bel Fuse A | LightPath Technologies vs. Cemtrex | LightPath Technologies vs. CTS Corporation | LightPath Technologies vs. MicroCloud Hologram |
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 the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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