Correlation Between Barings Global and Franklin Utilities
Can any of the company-specific risk be diversified away by investing in both Barings Global and Franklin Utilities 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 Global and Franklin Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Global Floating and Franklin Utilities Fund, you can compare the effects of market volatilities on Barings Global and Franklin Utilities 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 Global with a short position of Franklin Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Franklin Utilities.
Diversification Opportunities for Barings Global and Franklin Utilities
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Franklin is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Franklin Utilities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Utilities and Barings Global 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 Global Floating are associated (or correlated) with Franklin Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Utilities has no effect on the direction of Barings Global i.e., Barings Global and Franklin Utilities go up and down completely randomly.
Pair Corralation between Barings Global and Franklin Utilities
Assuming the 90 days horizon Barings Global is expected to generate 1.07 times less return on investment than Franklin Utilities. But when comparing it to its historical volatility, Barings Global Floating is 5.48 times less risky than Franklin Utilities. It trades about 0.22 of its potential returns per unit of risk. Franklin Utilities Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,165 in Franklin Utilities Fund on September 3, 2024 and sell it today you would earn a total of 462.00 from holding Franklin Utilities Fund or generate 21.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Franklin Utilities Fund
Performance |
| Timeline |
| Barings Global Floating |
| Franklin Utilities |
Barings Global and Franklin Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Franklin Utilities
The main advantage of trading using opposite Barings Global and Franklin Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Franklin Utilities 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 Utilities will offset losses from the drop in Franklin Utilities' long position.| Barings Global vs. Oppenheimer Senior Floating | Barings Global vs. Oppenheimer Senior Floating | Barings Global vs. Floating Rate Fund | Barings Global vs. Floating Rate Fund |
| Franklin Utilities vs. Ab Global Risk | Franklin Utilities vs. Ab High Income | Franklin Utilities vs. Nuveen High Income | Franklin Utilities vs. Calvert High Yield |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |