Correlation Between Omni Small and Franklin New
Can any of the company-specific risk be diversified away by investing in both Omni Small and Franklin New 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 New 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 New York, you can compare the effects of market volatilities on Omni Small and Franklin New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omni Small and Franklin New.
Diversification Opportunities for Omni Small and Franklin New
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Omni and Franklin is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Omni Small Cap Value and Franklin New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New York 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 New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New York has no effect on the direction of Omni Small i.e., Omni Small and Franklin New go up and down completely randomly.
Pair Corralation between Omni Small and Franklin New
Assuming the 90 days horizon Omni Small Cap Value is expected to generate 5.1 times more return on investment than Franklin New. However, Omni Small is 5.1 times more volatile than Franklin New York. It trades about 0.06 of its potential returns per unit of risk. Franklin New York is currently generating about 0.06 per unit of risk. If you would invest 1,658 in Omni Small Cap Value on September 12, 2024 and sell it today you would earn a total of 462.00 from holding Omni Small Cap Value or generate 27.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omni Small Cap Value vs. Franklin New York
Performance |
| Timeline |
| Omni Small Cap |
| Franklin New York |
Omni Small and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omni Small and Franklin New
The main advantage of trading using opposite Omni Small and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omni Small position performs unexpectedly, Franklin New 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 New will offset losses from the drop in Franklin New's long position.| Omni Small vs. Davenport Small Cap | Omni Small vs. Lord Abbett Diversified | Omni Small vs. Jhancock Diversified Macro | Omni Small vs. Pioneer Diversified High |
| Franklin New vs. Vanguard Small Cap Value | Franklin New vs. Palm Valley Capital | Franklin New vs. Omni Small Cap Value | Franklin New vs. Applied Finance Explorer |
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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