Correlation Between Us Equity and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Us Equity and Franklin Growth 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 Us Equity and Franklin Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Equity Growth and Franklin Growth Opportunities, you can compare the effects of market volatilities on Us Equity and Franklin Growth 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 Us Equity with a short position of Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Equity and Franklin Growth.
Diversification Opportunities for Us Equity and Franklin Growth
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BGGKX and Franklin is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding The Equity Growth and Franklin Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth Oppo and Us Equity 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 The Equity Growth are associated (or correlated) with Franklin Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth Oppo has no effect on the direction of Us Equity i.e., Us Equity and Franklin Growth go up and down completely randomly.
Pair Corralation between Us Equity and Franklin Growth
Assuming the 90 days horizon The Equity Growth is expected to generate 1.32 times more return on investment than Franklin Growth. However, Us Equity is 1.32 times more volatile than Franklin Growth Opportunities. It trades about 0.09 of its potential returns per unit of risk. Franklin Growth Opportunities is currently generating about 0.07 per unit of risk. If you would invest 2,152 in The Equity Growth on August 27, 2024 and sell it today you would earn a total of 565.00 from holding The Equity Growth or generate 26.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Equity Growth vs. Franklin Growth Opportunities
Performance |
| Timeline |
| Equity Growth |
| Franklin Growth Oppo |
Us Equity and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Equity and Franklin Growth
The main advantage of trading using opposite Us Equity and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Equity position performs unexpectedly, Franklin Growth 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 Growth will offset losses from the drop in Franklin Growth's long position.| Us Equity vs. Siit Ultra Short | Us Equity vs. Calvert Short Duration | Us Equity vs. Angel Oak Ultrashort | Us Equity vs. Short Intermediate Bond Fund |
| Franklin Growth vs. Franklin Mutual Beacon | Franklin Growth vs. Templeton Developing Markets | Franklin Growth vs. Franklin Mutual Global | Franklin Growth vs. Franklin Mutual Global |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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