Correlation Between Barings Active and Franklin Natural
Can any of the company-specific risk be diversified away by investing in both Barings Active and Franklin Natural 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 Barings Active and Franklin Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and Franklin Natural Resources, you can compare the effects of market volatilities on Barings Active and Franklin Natural 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 Barings Active with a short position of Franklin Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Franklin Natural.
Diversification Opportunities for Barings Active and Franklin Natural
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Barings and Franklin is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Franklin Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Natural Res and Barings Active 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 Barings Active Short are associated (or correlated) with Franklin Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Natural Res has no effect on the direction of Barings Active i.e., Barings Active and Franklin Natural go up and down completely randomly.
Pair Corralation between Barings Active and Franklin Natural
Assuming the 90 days horizon Barings Active Short is expected to generate 0.13 times more return on investment than Franklin Natural. However, Barings Active Short is 7.58 times less risky than Franklin Natural. It trades about 0.24 of its potential returns per unit of risk. Franklin Natural Resources is currently generating about 0.03 per unit of risk. If you would invest 835.00 in Barings Active Short on December 7, 2024 and sell it today you would earn a total of 96.00 from holding Barings Active Short or generate 11.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Franklin Natural Resources
Performance |
| Timeline |
| Barings Active Short |
| Franklin Natural Res |
Barings Active and Franklin Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Franklin Natural
The main advantage of trading using opposite Barings Active and Franklin Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Franklin Natural 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 Natural will offset losses from the drop in Franklin Natural's long position.| Barings Active vs. Transamerica High Yield | Barings Active vs. Ab High Income | Barings Active vs. Rivernorthoaktree High Income | Barings Active vs. Intal High Relative |
| Franklin Natural vs. T Rowe Price | Franklin Natural vs. Tiaa Cref Large Cap Value | Franklin Natural vs. Touchstone Large Cap | Franklin Natural vs. Profunds Large Cap Growth |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |