Correlation Between Barloworld and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Barloworld 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 Barloworld and Franklin Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barloworld Ltd ADR and Franklin Growth Fund, you can compare the effects of market volatilities on Barloworld 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 Barloworld with a short position of Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Franklin Growth.
Diversification Opportunities for Barloworld and Franklin Growth
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barloworld and Franklin is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Franklin Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth and Barloworld 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 Barloworld Ltd ADR 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 has no effect on the direction of Barloworld i.e., Barloworld and Franklin Growth go up and down completely randomly.
Pair Corralation between Barloworld and Franklin Growth
Assuming the 90 days horizon Barloworld Ltd ADR is expected to generate 5.91 times more return on investment than Franklin Growth. However, Barloworld is 5.91 times more volatile than Franklin Growth Fund. It trades about 0.04 of its potential returns per unit of risk. Franklin Growth Fund is currently generating about 0.05 per unit of risk. If you would invest 459.00 in Barloworld Ltd ADR on November 27, 2024 and sell it today you would earn a total of 66.00 from holding Barloworld Ltd ADR or generate 14.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 34.89% |
| Values | Daily Returns |
Barloworld Ltd ADR vs. Franklin Growth Fund
Performance |
| Timeline |
| Barloworld ADR |
| Franklin Growth |
Barloworld and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and Franklin Growth
The main advantage of trading using opposite Barloworld and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld 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.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| Franklin Growth vs. Rbc Emerging Markets | Franklin Growth vs. Investec Emerging Markets | Franklin Growth vs. Ep Emerging Markets | Franklin Growth vs. Calvert Developed Market |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |