Correlation Between Franklin Resources and Blackrock Muniyield
Can any of the company-specific risk be diversified away by investing in both Franklin Resources and Blackrock Muniyield 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 Blackrock Muniyield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Resources and Blackrock Muniyield Quality, you can compare the effects of market volatilities on Franklin Resources and Blackrock Muniyield 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 Blackrock Muniyield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Resources and Blackrock Muniyield.
Diversification Opportunities for Franklin Resources and Blackrock Muniyield
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Blackrock is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Resources and Blackrock Muniyield Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniyield 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 Blackrock Muniyield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniyield has no effect on the direction of Franklin Resources i.e., Franklin Resources and Blackrock Muniyield go up and down completely randomly.
Pair Corralation between Franklin Resources and Blackrock Muniyield
Considering the 90-day investment horizon Franklin Resources is expected to generate 2.68 times more return on investment than Blackrock Muniyield. However, Franklin Resources is 2.68 times more volatile than Blackrock Muniyield Quality. It trades about 0.22 of its potential returns per unit of risk. Blackrock Muniyield Quality is currently generating about 0.21 per unit of risk. If you would invest 2,089 in Franklin Resources on August 31, 2024 and sell it today you would earn a total of 179.00 from holding Franklin Resources or generate 8.57% 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. Blackrock Muniyield Quality
Performance |
| Timeline |
| Franklin Resources |
| Blackrock Muniyield |
Franklin Resources and Blackrock Muniyield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Resources and Blackrock Muniyield
The main advantage of trading using opposite Franklin Resources and Blackrock Muniyield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Resources position performs unexpectedly, Blackrock Muniyield 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 Blackrock Muniyield will offset losses from the drop in Blackrock Muniyield's long position.| Franklin Resources vs. BlackRock | Franklin Resources vs. Main Street Capital | Franklin Resources vs. Blackstone Group | Franklin Resources vs. Ares Capital |
| Blackrock Muniyield vs. MFS Investment Grade | Blackrock Muniyield vs. Eaton Vance Municipal | Blackrock Muniyield vs. DTF Tax Free | Blackrock Muniyield vs. HUMANA INC |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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