Correlation Between Franklin Street and Community Healthcare
Can any of the company-specific risk be diversified away by investing in both Franklin Street and Community Healthcare 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 Street and Community Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Street Properties and Community Healthcare Trust, you can compare the effects of market volatilities on Franklin Street and Community Healthcare 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 Street with a short position of Community Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Street and Community Healthcare.
Diversification Opportunities for Franklin Street and Community Healthcare
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Community is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Street Properties and Community Healthcare Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community Healthcare and Franklin Street 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 Street Properties are associated (or correlated) with Community Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community Healthcare has no effect on the direction of Franklin Street i.e., Franklin Street and Community Healthcare go up and down completely randomly.
Pair Corralation between Franklin Street and Community Healthcare
Considering the 90-day investment horizon Franklin Street Properties is expected to generate 1.47 times more return on investment than Community Healthcare. However, Franklin Street is 1.47 times more volatile than Community Healthcare Trust. It trades about 0.02 of its potential returns per unit of risk. Community Healthcare Trust is currently generating about -0.04 per unit of risk. If you would invest 151.00 in Franklin Street Properties on March 29, 2025 and sell it today you would earn a total of 20.00 from holding Franklin Street Properties or generate 13.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Street Properties vs. Community Healthcare Trust
Performance |
| Timeline |
| Franklin Street Prop |
| Community Healthcare |
Franklin Street and Community Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Street and Community Healthcare
The main advantage of trading using opposite Franklin Street and Community Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Street position performs unexpectedly, Community Healthcare 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 Community Healthcare will offset losses from the drop in Community Healthcare's long position.| Franklin Street vs. Cousins Properties Incorporated | Franklin Street vs. Creative Media Community | Franklin Street vs. Highwoods Properties | Franklin Street vs. Douglas Emmett |
| Community Healthcare vs. Global Medical REIT | Community Healthcare vs. National Health Investors | Community Healthcare vs. Healthpeak Properties | Community Healthcare vs. Sabra Healthcare REIT |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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