Correlation Between Catalystcifc Floating and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Catalystcifc Floating and Franklin Mutual 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 Catalystcifc Floating and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalystcifc Floating Rate and Franklin Mutual Global, you can compare the effects of market volatilities on Catalystcifc Floating and Franklin Mutual 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 Catalystcifc Floating with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalystcifc Floating and Franklin Mutual.
Diversification Opportunities for Catalystcifc Floating and Franklin Mutual
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Catalystcifc and Franklin is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Catalystcifc Floating Rate and Franklin Mutual Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Global and Catalystcifc Floating 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 Catalystcifc Floating Rate are associated (or correlated) with Franklin Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Mutual Global has no effect on the direction of Catalystcifc Floating i.e., Catalystcifc Floating and Franklin Mutual go up and down completely randomly.
Pair Corralation between Catalystcifc Floating and Franklin Mutual
Assuming the 90 days horizon Catalystcifc Floating Rate is expected to generate 0.17 times more return on investment than Franklin Mutual. However, Catalystcifc Floating Rate is 5.72 times less risky than Franklin Mutual. It trades about 0.26 of its potential returns per unit of risk. Franklin Mutual Global is currently generating about -0.07 per unit of risk. If you would invest 916.00 in Catalystcifc Floating Rate on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Catalystcifc Floating Rate or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Catalystcifc Floating Rate vs. Franklin Mutual Global
Performance |
| Timeline |
| Catalystcifc Floating |
| Franklin Mutual Global |
Catalystcifc Floating and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalystcifc Floating and Franklin Mutual
The main advantage of trading using opposite Catalystcifc Floating and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalystcifc Floating position performs unexpectedly, Franklin Mutual 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 Mutual will offset losses from the drop in Franklin Mutual's long position.The idea behind Catalystcifc Floating Rate and Franklin Mutual Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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