Correlation Between Bond Fund and Franklin High
Can any of the company-specific risk be diversified away by investing in both Bond Fund and Franklin High 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 Bond Fund and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bond Fund Of and Franklin High Yield, you can compare the effects of market volatilities on Bond Fund and Franklin High 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 Bond Fund with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bond Fund and Franklin High.
Diversification Opportunities for Bond Fund and Franklin High
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bond and Franklin is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bond Fund Of and Franklin High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Yield and Bond Fund 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 Bond Fund Of are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Yield has no effect on the direction of Bond Fund i.e., Bond Fund and Franklin High go up and down completely randomly.
Pair Corralation between Bond Fund and Franklin High
Assuming the 90 days horizon Bond Fund is expected to generate 3.68 times less return on investment than Franklin High. But when comparing it to its historical volatility, Bond Fund Of is 1.08 times less risky than Franklin High. It trades about 0.07 of its potential returns per unit of risk. Franklin High Yield is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 897.00 in Franklin High Yield on August 30, 2024 and sell it today you would earn a total of 18.00 from holding Franklin High Yield or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bond Fund Of vs. Franklin High Yield
Performance |
| Timeline |
| Bond Fund |
| Franklin High Yield |
Bond Fund and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bond Fund and Franklin High
The main advantage of trading using opposite Bond Fund and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bond Fund position performs unexpectedly, Franklin High 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 High will offset losses from the drop in Franklin High's long position.| Bond Fund vs. Hennessy Technology Fund | Bond Fund vs. Towpath Technology | Bond Fund vs. Allianzgi Technology Fund | Bond Fund vs. Blackrock Science Technology |
| Franklin High vs. Pgim Jennison Technology | Franklin High vs. Allianzgi Technology Fund | Franklin High vs. Hennessy Technology Fund | Franklin High vs. Invesco Technology Fund |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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