Correlation Between Cardano and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Cardano and Franklin Growth 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 Cardano and Franklin Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardano and Franklin Growth Fund, you can compare the effects of market volatilities on Cardano and Franklin Growth 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 Cardano with a short position of Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and Franklin Growth.
Diversification Opportunities for Cardano and Franklin Growth
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cardano and Franklin is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and Franklin Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth and Cardano 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 Cardano are associated (or correlated) with Franklin Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth has no effect on the direction of Cardano i.e., Cardano and Franklin Growth go up and down completely randomly.
Pair Corralation between Cardano and Franklin Growth
Assuming the 90 days trading horizon Cardano is expected to generate 5.8 times more return on investment than Franklin Growth. However, Cardano is 5.8 times more volatile than Franklin Growth Fund. It trades about 0.09 of its potential returns per unit of risk. Franklin Growth Fund is currently generating about 0.05 per unit of risk. If you would invest 39.00 in Cardano on October 20, 2024 and sell it today you would earn a total of 75.00 from holding Cardano or generate 192.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 60.2% |
| Values | Daily Returns |
Cardano vs. Franklin Growth Fund
Performance |
| Timeline |
| Cardano |
| Franklin Growth |
Cardano and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardano and Franklin Growth
The main advantage of trading using opposite Cardano and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano position performs unexpectedly, Franklin Growth 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 Growth will offset losses from the drop in Franklin Growth's long position.The idea behind Cardano and Franklin Growth Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Franklin Growth vs. Catalystmillburn Hedge Strategy | Franklin Growth vs. Nasdaq 100 2x Strategy | Franklin Growth vs. Realestaterealreturn Strategy Fund | Franklin Growth vs. Angel Oak Multi Strategy |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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