Correlation Between Boston Partners and Franklin Convertible
Can any of the company-specific risk be diversified away by investing in both Boston Partners and Franklin Convertible 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 Boston Partners and Franklin Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Partners Small and Franklin Vertible Securities, you can compare the effects of market volatilities on Boston Partners and Franklin Convertible 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 Boston Partners with a short position of Franklin Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Partners and Franklin Convertible.
Diversification Opportunities for Boston Partners and Franklin Convertible
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Boston and Franklin is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners Small and Franklin Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Convertible and Boston Partners 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 Boston Partners Small are associated (or correlated) with Franklin Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Convertible has no effect on the direction of Boston Partners i.e., Boston Partners and Franklin Convertible go up and down completely randomly.
Pair Corralation between Boston Partners and Franklin Convertible
Assuming the 90 days horizon Boston Partners Small is expected to generate 1.9 times more return on investment than Franklin Convertible. However, Boston Partners is 1.9 times more volatile than Franklin Vertible Securities. It trades about 0.04 of its potential returns per unit of risk. Franklin Vertible Securities is currently generating about 0.06 per unit of risk. If you would invest 2,414 in Boston Partners Small on September 1, 2024 and sell it today you would earn a total of 544.00 from holding Boston Partners Small or generate 22.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Boston Partners Small vs. Franklin Vertible Securities
Performance |
| Timeline |
| Boston Partners Small |
| Franklin Convertible |
Boston Partners and Franklin Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Partners and Franklin Convertible
The main advantage of trading using opposite Boston Partners and Franklin Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Partners position performs unexpectedly, Franklin Convertible 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 Convertible will offset losses from the drop in Franklin Convertible's long position.| Boston Partners vs. Aggressive Investors 1 | Boston Partners vs. Buffalo Small Cap | Boston Partners vs. Rice Hall James | Boston Partners vs. Putnam Small Cap |
| Franklin Convertible vs. Palm Valley Capital | Franklin Convertible vs. Royce Opportunity Fund | Franklin Convertible vs. Heartland Value Plus | Franklin Convertible vs. Boston Partners Small |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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