Correlation Between Columbia Small and Franklin Convertible
Can any of the company-specific risk be diversified away by investing in both Columbia Small and Franklin Convertible 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 Columbia Small and Franklin Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Small Cap and Franklin Vertible Securities, you can compare the effects of market volatilities on Columbia Small and Franklin Convertible 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 Columbia Small with a short position of Franklin Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Small and Franklin Convertible.
Diversification Opportunities for Columbia Small and Franklin Convertible
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Columbia and Franklin is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Small Cap and Franklin Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Convertible and Columbia Small 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 Columbia Small Cap are associated (or correlated) with Franklin Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Convertible has no effect on the direction of Columbia Small i.e., Columbia Small and Franklin Convertible go up and down completely randomly.
Pair Corralation between Columbia Small and Franklin Convertible
Assuming the 90 days horizon Columbia Small Cap is expected to generate 2.52 times more return on investment than Franklin Convertible. However, Columbia Small is 2.52 times more volatile than Franklin Vertible Securities. It trades about 0.26 of its potential returns per unit of risk. Franklin Vertible Securities is currently generating about 0.45 per unit of risk. If you would invest 2,809 in Columbia Small Cap on August 28, 2024 and sell it today you would earn a total of 250.00 from holding Columbia Small Cap or generate 8.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Small Cap vs. Franklin Vertible Securities
Performance |
| Timeline |
| Columbia Small Cap |
| Franklin Convertible |
Columbia Small and Franklin Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Small and Franklin Convertible
The main advantage of trading using opposite Columbia Small and Franklin Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Small position performs unexpectedly, Franklin Convertible 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 Convertible will offset losses from the drop in Franklin Convertible's long position.| Columbia Small vs. Franklin Vertible Securities | Columbia Small vs. Allianzgi Convertible Income | Columbia Small vs. Advent Claymore Convertible | Columbia Small vs. Invesco Vertible Securities |
| Franklin Convertible vs. Franklin Mutual Beacon | Franklin Convertible vs. Templeton Developing Markets | Franklin Convertible vs. Franklin Mutual Global | Franklin Convertible vs. Franklin Mutual Global |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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