Correlation Between Atlantica Sustainable and Franklin Utilities
Can any of the company-specific risk be diversified away by investing in both Atlantica Sustainable 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 Atlantica Sustainable and Franklin Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlantica Sustainable Infrastructure and Franklin Utilities Fund, you can compare the effects of market volatilities on Atlantica Sustainable 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 Atlantica Sustainable with a short position of Franklin Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantica Sustainable and Franklin Utilities.
Diversification Opportunities for Atlantica Sustainable and Franklin Utilities
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atlantica and Franklin is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Atlantica Sustainable Infrastr and Franklin Utilities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Utilities and Atlantica Sustainable 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 Atlantica Sustainable Infrastructure 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 Atlantica Sustainable i.e., Atlantica Sustainable and Franklin Utilities go up and down completely randomly.
Pair Corralation between Atlantica Sustainable and Franklin Utilities
Allowing for the 90-day total investment horizon Atlantica Sustainable is expected to generate 1.16 times less return on investment than Franklin Utilities. In addition to that, Atlantica Sustainable is 1.61 times more volatile than Franklin Utilities Fund. It trades about 0.11 of its total potential returns per unit of risk. Franklin Utilities Fund is currently generating about 0.2 per unit of volatility. If you would invest 1,851 in Franklin Utilities Fund on August 25, 2024 and sell it today you would earn a total of 722.00 from holding Franklin Utilities Fund or generate 39.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlantica Sustainable Infrastr vs. Franklin Utilities Fund
Performance |
| Timeline |
| Atlantica Sustainable |
| Franklin Utilities |
Atlantica Sustainable and Franklin Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlantica Sustainable and Franklin Utilities
The main advantage of trading using opposite Atlantica Sustainable and Franklin Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantica Sustainable 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.| Atlantica Sustainable vs. Clearway Energy | Atlantica Sustainable vs. Brookfield Renewable Corp | Atlantica Sustainable vs. Nextera Energy Partners | Atlantica Sustainable vs. Brookfield Renewable Partners |
| Franklin Utilities vs. Angel Oak Ultrashort | Franklin Utilities vs. Calvert Short Duration | Franklin Utilities vs. Locorr Longshort Modities | Franklin Utilities vs. Aqr Long Short Equity |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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