Correlation Between Chartwell Small and Franklin High
Can any of the company-specific risk be diversified away by investing in both Chartwell Small and Franklin High 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 Chartwell Small and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chartwell Small Cap and Franklin High Yield, you can compare the effects of market volatilities on Chartwell Small and Franklin High 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 Chartwell Small with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chartwell Small and Franklin High.
Diversification Opportunities for Chartwell Small and Franklin High
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Chartwell and Franklin is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Chartwell Small Cap and Franklin High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Yield and Chartwell 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 Chartwell Small Cap are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Yield has no effect on the direction of Chartwell Small i.e., Chartwell Small and Franklin High go up and down completely randomly.
Pair Corralation between Chartwell Small and Franklin High
Assuming the 90 days horizon Chartwell Small Cap is expected to generate 3.89 times more return on investment than Franklin High. However, Chartwell Small is 3.89 times more volatile than Franklin High Yield. It trades about 0.05 of its potential returns per unit of risk. Franklin High Yield is currently generating about 0.08 per unit of risk. If you would invest 1,816 in Chartwell Small Cap on September 3, 2024 and sell it today you would earn a total of 485.00 from holding Chartwell Small Cap or generate 26.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chartwell Small Cap vs. Franklin High Yield
Performance |
| Timeline |
| Chartwell Small Cap |
| Franklin High Yield |
Chartwell Small and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chartwell Small and Franklin High
The main advantage of trading using opposite Chartwell Small and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chartwell Small position performs unexpectedly, Franklin High 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 High will offset losses from the drop in Franklin High's long position.| Chartwell Small vs. Global Technology Portfolio | Chartwell Small vs. Dreyfus Technology Growth | Chartwell Small vs. Invesco Technology Fund | Chartwell Small vs. Firsthand Technology Opportunities |
| Franklin High vs. Nuveen High Yield | Franklin High vs. Nuveen High Yield | Franklin High vs. Nuveen High Yield | Franklin High vs. Nuveen 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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