Correlation Between Astar and Franklin
Can any of the company-specific risk be diversified away by investing in both Astar and Franklin 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 Astar and Franklin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Franklin Government Money, you can compare the effects of market volatilities on Astar and Franklin 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 Astar with a short position of Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Franklin.
Diversification Opportunities for Astar and Franklin
Pay attention - limited upside
The 3 months correlation between Astar and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Franklin Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Government Money and Astar 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 Astar are associated (or correlated) with Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Government Money has no effect on the direction of Astar i.e., Astar and Franklin go up and down completely randomly.
Pair Corralation between Astar and Franklin
If you would invest 100.00 in Franklin Government Money on October 11, 2024 and sell it today you would earn a total of 0.00 from holding Franklin Government Money or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Astar vs. Franklin Government Money
Performance |
| Timeline |
| Astar |
| Franklin Government Money |
Astar and Franklin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Franklin
The main advantage of trading using opposite Astar and Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Franklin 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 will offset losses from the drop in Franklin's long position.The idea behind Astar and Franklin Government Money 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 vs. Mairs Power Growth | Franklin vs. T Rowe Price | Franklin vs. Transamerica Capital Growth | Franklin vs. T Rowe Price |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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