Correlation Between Strategic Allocation: and Franklin Income
Can any of the company-specific risk be diversified away by investing in both Strategic Allocation: and Franklin Income 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 Strategic Allocation: and Franklin Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Allocation Aggressive and Franklin Income Fund, you can compare the effects of market volatilities on Strategic Allocation: and Franklin Income 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 Strategic Allocation: with a short position of Franklin Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Allocation: and Franklin Income.
Diversification Opportunities for Strategic Allocation: and Franklin Income
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Strategic and Franklin is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Allocation Aggressiv and Franklin Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Income and Strategic Allocation: 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 Strategic Allocation Aggressive are associated (or correlated) with Franklin Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Income has no effect on the direction of Strategic Allocation: i.e., Strategic Allocation: and Franklin Income go up and down completely randomly.
Pair Corralation between Strategic Allocation: and Franklin Income
Assuming the 90 days horizon Strategic Allocation Aggressive is expected to generate 1.48 times more return on investment than Franklin Income. However, Strategic Allocation: is 1.48 times more volatile than Franklin Income Fund. It trades about 0.09 of its potential returns per unit of risk. Franklin Income Fund is currently generating about 0.07 per unit of risk. If you would invest 691.00 in Strategic Allocation Aggressive on September 3, 2024 and sell it today you would earn a total of 189.00 from holding Strategic Allocation Aggressive or generate 27.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Allocation Aggressiv vs. Franklin Income Fund
Performance |
| Timeline |
| Strategic Allocation: |
| Franklin Income |
Strategic Allocation: and Franklin Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Allocation: and Franklin Income
The main advantage of trading using opposite Strategic Allocation: and Franklin Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Allocation: position performs unexpectedly, Franklin Income 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 Income will offset losses from the drop in Franklin Income's long position.| Strategic Allocation: vs. Wasatch Small Cap | Strategic Allocation: vs. Pgim Jennison Diversified | Strategic Allocation: vs. Small Cap Stock | Strategic Allocation: vs. Massmutual Premier Diversified |
| Franklin Income vs. Jhancock Real Estate | Franklin Income vs. Dunham Real Estate | Franklin Income vs. Franklin Real Estate | Franklin Income vs. Columbia Real Estate |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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