Correlation Between Franklin Resources and AMTD IDEA
Can any of the company-specific risk be diversified away by investing in both Franklin Resources and AMTD IDEA 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 Franklin Resources and AMTD IDEA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Resources and AMTD IDEA Group, you can compare the effects of market volatilities on Franklin Resources and AMTD IDEA 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 Franklin Resources with a short position of AMTD IDEA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Resources and AMTD IDEA.
Diversification Opportunities for Franklin Resources and AMTD IDEA
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and AMTD is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Resources and AMTD IDEA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMTD IDEA Group and Franklin Resources 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 Franklin Resources are associated (or correlated) with AMTD IDEA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMTD IDEA Group has no effect on the direction of Franklin Resources i.e., Franklin Resources and AMTD IDEA go up and down completely randomly.
Pair Corralation between Franklin Resources and AMTD IDEA
Considering the 90-day investment horizon Franklin Resources is expected to generate 0.62 times more return on investment than AMTD IDEA. However, Franklin Resources is 1.62 times less risky than AMTD IDEA. It trades about 0.25 of its potential returns per unit of risk. AMTD IDEA Group is currently generating about -0.06 per unit of risk. If you would invest 2,077 in Franklin Resources on September 1, 2024 and sell it today you would earn a total of 199.00 from holding Franklin Resources or generate 9.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Resources vs. AMTD IDEA Group
Performance |
| Timeline |
| Franklin Resources |
| AMTD IDEA Group |
Franklin Resources and AMTD IDEA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Resources and AMTD IDEA
The main advantage of trading using opposite Franklin Resources and AMTD IDEA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Resources position performs unexpectedly, AMTD IDEA 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 AMTD IDEA will offset losses from the drop in AMTD IDEA's long position.| Franklin Resources vs. BlackRock | Franklin Resources vs. Main Street Capital | Franklin Resources vs. Blackstone Group | Franklin Resources vs. Ares Capital |
| AMTD IDEA vs. Franklin Resources | AMTD IDEA vs. Janus Henderson Group | AMTD IDEA vs. State Street Corp | AMTD IDEA vs. Northern Trust |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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