Correlation Between Franklin and Allianzgi Health
Can any of the company-specific risk be diversified away by investing in both Franklin and Allianzgi Health 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 Franklin and Allianzgi Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin K2 Alternative and Allianzgi Health Sciences, you can compare the effects of market volatilities on Franklin and Allianzgi Health 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 Franklin with a short position of Allianzgi Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin and Allianzgi Health.
Diversification Opportunities for Franklin and Allianzgi Health
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and Allianzgi is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Franklin K2 Alternative and Allianzgi Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Health Sciences and Franklin 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 Franklin K2 Alternative are associated (or correlated) with Allianzgi Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Health Sciences has no effect on the direction of Franklin i.e., Franklin and Allianzgi Health go up and down completely randomly.
Pair Corralation between Franklin and Allianzgi Health
Assuming the 90 days horizon Franklin K2 Alternative is expected to generate 0.24 times more return on investment than Allianzgi Health. However, Franklin K2 Alternative is 4.11 times less risky than Allianzgi Health. It trades about 0.16 of its potential returns per unit of risk. Allianzgi Health Sciences is currently generating about 0.03 per unit of risk. If you would invest 1,075 in Franklin K2 Alternative on September 2, 2024 and sell it today you would earn a total of 128.00 from holding Franklin K2 Alternative or generate 11.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin K2 Alternative vs. Allianzgi Health Sciences
Performance |
| Timeline |
| Franklin K2 Alternative |
| Allianzgi Health Sciences |
Franklin and Allianzgi Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin and Allianzgi Health
The main advantage of trading using opposite Franklin and Allianzgi Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin position performs unexpectedly, Allianzgi Health 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 Allianzgi Health will offset losses from the drop in Allianzgi Health's long position.| Franklin vs. Goldman Sachs Clean | Franklin vs. James Balanced Golden | Franklin vs. Global Gold Fund | Franklin vs. International Investors Gold |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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