Correlation Between High-yield Municipal and Franklin Core
Can any of the company-specific risk be diversified away by investing in both High-yield Municipal and Franklin Core 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 High-yield Municipal and Franklin Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Yield Municipal Fund and Franklin Core Dividend, you can compare the effects of market volatilities on High-yield Municipal and Franklin Core 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 High-yield Municipal with a short position of Franklin Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of High-yield Municipal and Franklin Core.
Diversification Opportunities for High-yield Municipal and Franklin Core
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between High-yield and Franklin is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Municipal Fund and Franklin Core Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Core Dividend and High-yield Municipal 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 High Yield Municipal Fund are associated (or correlated) with Franklin Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Core Dividend has no effect on the direction of High-yield Municipal i.e., High-yield Municipal and Franklin Core go up and down completely randomly.
Pair Corralation between High-yield Municipal and Franklin Core
Assuming the 90 days horizon High-yield Municipal is expected to generate 3.66 times less return on investment than Franklin Core. But when comparing it to its historical volatility, High Yield Municipal Fund is 2.64 times less risky than Franklin Core. It trades about 0.1 of its potential returns per unit of risk. Franklin Core Dividend is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,244 in Franklin Core Dividend on August 31, 2024 and sell it today you would earn a total of 1,414 from holding Franklin Core Dividend or generate 43.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Yield Municipal Fund vs. Franklin Core Dividend
Performance |
| Timeline |
| High Yield Municipal |
| Franklin Core Dividend |
High-yield Municipal and Franklin Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High-yield Municipal and Franklin Core
The main advantage of trading using opposite High-yield Municipal and Franklin Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High-yield Municipal position performs unexpectedly, Franklin Core 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 Core will offset losses from the drop in Franklin Core's long position.| High-yield Municipal vs. High Yield Fund Investor | High-yield Municipal vs. Intermediate Term Tax Free Bond | High-yield Municipal vs. California High Yield Municipal | High-yield Municipal vs. T Rowe Price |
| Franklin Core vs. WisdomTree Trust | Franklin Core vs. Franklin International Core | Franklin Core vs. Franklin Templeton ETF | Franklin Core vs. Affinity World Leaders |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |