Correlation Between Pro-blend(r) Moderate and Franklin Moderate
Can any of the company-specific risk be diversified away by investing in both Pro-blend(r) Moderate and Franklin Moderate 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 Pro-blend(r) Moderate and Franklin Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pro Blend Moderate Term and Franklin Moderate Allocation, you can compare the effects of market volatilities on Pro-blend(r) Moderate and Franklin Moderate 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 Pro-blend(r) Moderate with a short position of Franklin Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pro-blend(r) Moderate and Franklin Moderate.
Diversification Opportunities for Pro-blend(r) Moderate and Franklin Moderate
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pro-blend(r) and Franklin is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Pro Blend Moderate Term and Franklin Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Moderate and Pro-blend(r) Moderate 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 Pro Blend Moderate Term are associated (or correlated) with Franklin Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Moderate has no effect on the direction of Pro-blend(r) Moderate i.e., Pro-blend(r) Moderate and Franklin Moderate go up and down completely randomly.
Pair Corralation between Pro-blend(r) Moderate and Franklin Moderate
Assuming the 90 days horizon Pro-blend(r) Moderate is expected to generate 1.95 times less return on investment than Franklin Moderate. But when comparing it to its historical volatility, Pro Blend Moderate Term is 1.12 times less risky than Franklin Moderate. It trades about 0.2 of its potential returns per unit of risk. Franklin Moderate Allocation is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 1,578 in Franklin Moderate Allocation on September 1, 2024 and sell it today you would earn a total of 51.00 from holding Franklin Moderate Allocation or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pro Blend Moderate Term vs. Franklin Moderate Allocation
Performance |
| Timeline |
| Pro-blend(r) Moderate |
| Franklin Moderate |
Pro-blend(r) Moderate and Franklin Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pro-blend(r) Moderate and Franklin Moderate
The main advantage of trading using opposite Pro-blend(r) Moderate and Franklin Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pro-blend(r) Moderate position performs unexpectedly, Franklin Moderate 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 Moderate will offset losses from the drop in Franklin Moderate's long position.| Pro-blend(r) Moderate vs. Pro Blend Servative Term | Pro-blend(r) Moderate vs. Pro Blend Extended Term | Pro-blend(r) Moderate vs. Pro Blend Maximum Term | Pro-blend(r) Moderate vs. Greenspring Fund Retail |
| Franklin Moderate vs. Jennison Natural Resources | Franklin Moderate vs. Oil Gas Ultrasector | Franklin Moderate vs. Clearbridge Energy Mlp | Franklin Moderate vs. Alpsalerian Energy Infrastructure |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |