Correlation Between Bbh Intermediate and Franklin Natural
Can any of the company-specific risk be diversified away by investing in both Bbh Intermediate and Franklin Natural 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 Bbh Intermediate and Franklin Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bbh Intermediate Municipal and Franklin Natural Resources, you can compare the effects of market volatilities on Bbh Intermediate and Franklin Natural 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 Bbh Intermediate with a short position of Franklin Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bbh Intermediate and Franklin Natural.
Diversification Opportunities for Bbh Intermediate and Franklin Natural
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bbh and Franklin is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Bbh Intermediate Municipal and Franklin Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Natural Res and Bbh Intermediate 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 Bbh Intermediate Municipal are associated (or correlated) with Franklin Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Natural Res has no effect on the direction of Bbh Intermediate i.e., Bbh Intermediate and Franklin Natural go up and down completely randomly.
Pair Corralation between Bbh Intermediate and Franklin Natural
Assuming the 90 days horizon Bbh Intermediate Municipal is expected to generate 0.13 times more return on investment than Franklin Natural. However, Bbh Intermediate Municipal is 7.88 times less risky than Franklin Natural. It trades about 0.34 of its potential returns per unit of risk. Franklin Natural Resources is currently generating about -0.1 per unit of risk. If you would invest 1,028 in Bbh Intermediate Municipal on September 13, 2024 and sell it today you would earn a total of 8.00 from holding Bbh Intermediate Municipal or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bbh Intermediate Municipal vs. Franklin Natural Resources
Performance |
| Timeline |
| Bbh Intermediate Mun |
| Franklin Natural Res |
Bbh Intermediate and Franklin Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bbh Intermediate and Franklin Natural
The main advantage of trading using opposite Bbh Intermediate and Franklin Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bbh Intermediate position performs unexpectedly, Franklin Natural 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 Natural will offset losses from the drop in Franklin Natural's long position.| Bbh Intermediate vs. Qs Large Cap | Bbh Intermediate vs. Dunham Large Cap | Bbh Intermediate vs. M Large Cap | Bbh Intermediate vs. American Mutual Fund |
| Franklin Natural vs. Vanguard Financials Index | Franklin Natural vs. Prudential Jennison Financial | Franklin Natural vs. John Hancock Financial | Franklin Natural vs. Mesirow Financial Small |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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