Correlation Between Artisan High and Franklin Utilities
Can any of the company-specific risk be diversified away by investing in both Artisan High and Franklin Utilities 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 Artisan High and Franklin Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Artisan High Income and Franklin Utilities Fund, you can compare the effects of market volatilities on Artisan High and Franklin Utilities 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 Artisan High with a short position of Franklin Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan High and Franklin Utilities.
Diversification Opportunities for Artisan High and Franklin Utilities
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Artisan and Franklin is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Artisan High Income and Franklin Utilities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Utilities and Artisan High 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 Artisan High Income are associated (or correlated) with Franklin Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Utilities has no effect on the direction of Artisan High i.e., Artisan High and Franklin Utilities go up and down completely randomly.
Pair Corralation between Artisan High and Franklin Utilities
Assuming the 90 days horizon Artisan High Income is expected to generate 0.3 times more return on investment than Franklin Utilities. However, Artisan High Income is 3.33 times less risky than Franklin Utilities. It trades about 0.15 of its potential returns per unit of risk. Franklin Utilities Fund is currently generating about 0.04 per unit of risk. If you would invest 731.00 in Artisan High Income on September 13, 2024 and sell it today you would earn a total of 189.00 from holding Artisan High Income or generate 25.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan High Income vs. Franklin Utilities Fund
Performance |
| Timeline |
| Artisan High Income |
| Franklin Utilities |
Artisan High and Franklin Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan High and Franklin Utilities
The main advantage of trading using opposite Artisan High and Franklin Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan High position performs unexpectedly, Franklin Utilities 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 Utilities will offset losses from the drop in Franklin Utilities' long position.| Artisan High vs. Doubleline Yield Opportunities | Artisan High vs. T Rowe Price | Artisan High vs. Pace High Yield | Artisan High vs. The National Tax Free |
| Franklin Utilities vs. T Rowe Price | Franklin Utilities vs. Calvert High Yield | Franklin Utilities vs. Artisan High Income | Franklin Utilities vs. Pace High Yield |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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