Correlation Between Short Duration and Franklin Adjustable
Can any of the company-specific risk be diversified away by investing in both Short Duration and Franklin Adjustable 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 Short Duration and Franklin Adjustable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Short Duration Inflation and Franklin Adjustable Government, you can compare the effects of market volatilities on Short Duration and Franklin Adjustable 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 Short Duration with a short position of Franklin Adjustable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short Duration and Franklin Adjustable.
Diversification Opportunities for Short Duration and Franklin Adjustable
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Short and Franklin is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Short Duration Inflation and Franklin Adjustable Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Adjustable and Short Duration 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 Short Duration Inflation are associated (or correlated) with Franklin Adjustable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Adjustable has no effect on the direction of Short Duration i.e., Short Duration and Franklin Adjustable go up and down completely randomly.
Pair Corralation between Short Duration and Franklin Adjustable
Assuming the 90 days horizon Short Duration Inflation is expected to generate 1.7 times more return on investment than Franklin Adjustable. However, Short Duration is 1.7 times more volatile than Franklin Adjustable Government. It trades about 0.09 of its potential returns per unit of risk. Franklin Adjustable Government is currently generating about 0.15 per unit of risk. If you would invest 950.00 in Short Duration Inflation on November 19, 2024 and sell it today you would earn a total of 93.00 from holding Short Duration Inflation or generate 9.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Short Duration Inflation vs. Franklin Adjustable Government
Performance |
| Timeline |
| Short Duration Inflation |
| Franklin Adjustable |
Short Duration and Franklin Adjustable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Short Duration and Franklin Adjustable
The main advantage of trading using opposite Short Duration and Franklin Adjustable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short Duration position performs unexpectedly, Franklin Adjustable 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 Adjustable will offset losses from the drop in Franklin Adjustable's long position.| Short Duration vs. Barings Emerging Markets | Short Duration vs. Siit Emerging Markets | Short Duration vs. Ab All Market | Short Duration vs. Ashmore Emerging Markets |
| Franklin Adjustable vs. Goldman Sachs Short | Franklin Adjustable vs. Global Gold Fund | Franklin Adjustable vs. Wells Fargo Advantage | Franklin Adjustable vs. Franklin Gold Precious |
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.
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