Correlation Between Barings Us and Franklin Maryland
Can any of the company-specific risk be diversified away by investing in both Barings Us and Franklin Maryland 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 Us and Franklin Maryland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings High Yield and Franklin Maryland Tax Free, you can compare the effects of market volatilities on Barings Us and Franklin Maryland 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 Us with a short position of Franklin Maryland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Us and Franklin Maryland.
Diversification Opportunities for Barings Us and Franklin Maryland
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Franklin is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Barings High Yield and Franklin Maryland Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Maryland Tax and Barings Us 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 High Yield are associated (or correlated) with Franklin Maryland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Maryland Tax has no effect on the direction of Barings Us i.e., Barings Us and Franklin Maryland go up and down completely randomly.
Pair Corralation between Barings Us and Franklin Maryland
Assuming the 90 days horizon Barings High Yield is expected to generate 0.99 times more return on investment than Franklin Maryland. However, Barings High Yield is 1.01 times less risky than Franklin Maryland. It trades about 0.13 of its potential returns per unit of risk. Franklin Maryland Tax Free is currently generating about 0.04 per unit of risk. If you would invest 688.00 in Barings High Yield on November 4, 2024 and sell it today you would earn a total of 129.00 from holding Barings High Yield or generate 18.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings High Yield vs. Franklin Maryland Tax Free
Performance |
| Timeline |
| Barings High Yield |
| Franklin Maryland Tax |
Barings Us and Franklin Maryland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Us and Franklin Maryland
The main advantage of trading using opposite Barings Us and Franklin Maryland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Us position performs unexpectedly, Franklin Maryland 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 Maryland will offset losses from the drop in Franklin Maryland's long position.| Barings Us vs. Davenport Small Cap | Barings Us vs. Global Diversified Income | Barings Us vs. Gmo Quality Fund | Barings Us vs. Issachar Fund Class |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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