Correlation Between American Funds and Franklin Corefolio
Can any of the company-specific risk be diversified away by investing in both American Funds and Franklin Corefolio 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 American Funds and Franklin Corefolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Growth and Franklin Efolio Allocation, you can compare the effects of market volatilities on American Funds and Franklin Corefolio 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 American Funds with a short position of Franklin Corefolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Franklin Corefolio.
Diversification Opportunities for American Funds and Franklin Corefolio
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and FRANKLIN is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Growth and Franklin Efolio Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Efolio Allo and American Funds 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 American Funds Growth are associated (or correlated) with Franklin Corefolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Efolio Allo has no effect on the direction of American Funds i.e., American Funds and Franklin Corefolio go up and down completely randomly.
Pair Corralation between American Funds and Franklin Corefolio
Assuming the 90 days horizon American Funds Growth is expected to generate 1.05 times more return on investment than Franklin Corefolio. However, American Funds is 1.05 times more volatile than Franklin Efolio Allocation. It trades about 0.29 of its potential returns per unit of risk. Franklin Efolio Allocation is currently generating about 0.3 per unit of risk. If you would invest 2,632 in American Funds Growth on September 4, 2024 and sell it today you would earn a total of 118.00 from holding American Funds Growth or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
American Funds Growth vs. Franklin Efolio Allocation
Performance |
| Timeline |
| American Funds Growth |
| Franklin Efolio Allo |
American Funds and Franklin Corefolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Franklin Corefolio
The main advantage of trading using opposite American Funds and Franklin Corefolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Franklin Corefolio 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 Corefolio will offset losses from the drop in Franklin Corefolio's long position.| American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
| Franklin Corefolio vs. Franklin Founding Funds | Franklin Corefolio vs. Franklin Growth Allocation | Franklin Corefolio vs. Franklin Growth Fund | Franklin Corefolio vs. Franklin Growth Opportunities |
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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