Correlation Between Five Point and Franklin Street
Can any of the company-specific risk be diversified away by investing in both Five Point and Franklin Street 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 Five Point and Franklin Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Five Point Holdings and Franklin Street Properties, you can compare the effects of market volatilities on Five Point and Franklin Street 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 Five Point with a short position of Franklin Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Five Point and Franklin Street.
Diversification Opportunities for Five Point and Franklin Street
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Five and Franklin is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Five Point Holdings and Franklin Street Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Street Prop and Five Point 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 Five Point Holdings are associated (or correlated) with Franklin Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Street Prop has no effect on the direction of Five Point i.e., Five Point and Franklin Street go up and down completely randomly.
Pair Corralation between Five Point and Franklin Street
Considering the 90-day investment horizon Five Point Holdings is expected to generate 1.2 times more return on investment than Franklin Street. However, Five Point is 1.2 times more volatile than Franklin Street Properties. It trades about 0.03 of its potential returns per unit of risk. Franklin Street Properties is currently generating about -0.02 per unit of risk. If you would invest 556.00 in Five Point Holdings on June 5, 2025 and sell it today you would earn a total of 12.00 from holding Five Point Holdings or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Five Point Holdings vs. Franklin Street Properties
Performance |
| Timeline |
| Five Point Holdings |
| Franklin Street Prop |
Five Point and Franklin Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Five Point and Franklin Street
The main advantage of trading using opposite Five Point and Franklin Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Five Point position performs unexpectedly, Franklin Street 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 Street will offset losses from the drop in Franklin Street's long position.| Five Point vs. American Realty Investors | Five Point vs. AMREP | Five Point vs. Clipper Realty | Five Point vs. Forestar Group |
| Franklin Street vs. COPT Defense Properties | Franklin Street vs. Cousins Properties Incorporated | Franklin Street vs. City Office | Franklin Street vs. Creative Media Community |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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