Correlation Between Omni Small and Franklin High
Can any of the company-specific risk be diversified away by investing in both Omni Small and Franklin High 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 Omni Small and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omni Small Cap Value and Franklin High Yield, you can compare the effects of market volatilities on Omni Small and Franklin High 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 Omni Small with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omni Small and Franklin High.
Diversification Opportunities for Omni Small and Franklin High
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Omni and Franklin is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Omni Small Cap Value and Franklin High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Yield and Omni Small 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 Omni Small Cap Value are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Yield has no effect on the direction of Omni Small i.e., Omni Small and Franklin High go up and down completely randomly.
Pair Corralation between Omni Small and Franklin High
Assuming the 90 days horizon Omni Small Cap Value is expected to generate 4.88 times more return on investment than Franklin High. However, Omni Small is 4.88 times more volatile than Franklin High Yield. It trades about 0.03 of its potential returns per unit of risk. Franklin High Yield is currently generating about 0.06 per unit of risk. If you would invest 1,607 in Omni Small Cap Value on September 28, 2024 and sell it today you would earn a total of 229.00 from holding Omni Small Cap Value or generate 14.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omni Small Cap Value vs. Franklin High Yield
Performance |
| Timeline |
| Omni Small Cap |
| Franklin High Yield |
Omni Small and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omni Small and Franklin High
The main advantage of trading using opposite Omni Small and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omni Small position performs unexpectedly, Franklin High 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 High will offset losses from the drop in Franklin High's long position.| Omni Small vs. T Rowe Price | Omni Small vs. Fisher Large Cap | Omni Small vs. Fm Investments Large | Omni Small vs. Upright Assets Allocation |
| Franklin High vs. Ridgeworth Seix Government | Franklin High vs. Intermediate Government Bond | Franklin High vs. Us Government Plus | Franklin High vs. Aig Government Money |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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