Correlation Between Franklin Federal and Jhancock Diversified
Can any of the company-specific risk be diversified away by investing in both Franklin Federal and Jhancock Diversified 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 Federal and Jhancock Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Federal Tax Free and Jhancock Diversified Macro, you can compare the effects of market volatilities on Franklin Federal and Jhancock Diversified 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 Federal with a short position of Jhancock Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Federal and Jhancock Diversified.
Diversification Opportunities for Franklin Federal and Jhancock Diversified
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Jhancock is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Federal Tax Free and Jhancock Diversified Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Diversified and Franklin Federal 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 Federal Tax Free are associated (or correlated) with Jhancock Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Diversified has no effect on the direction of Franklin Federal i.e., Franklin Federal and Jhancock Diversified go up and down completely randomly.
Pair Corralation between Franklin Federal and Jhancock Diversified
Assuming the 90 days horizon Franklin Federal Tax Free is expected to generate 0.51 times more return on investment than Jhancock Diversified. However, Franklin Federal Tax Free is 1.95 times less risky than Jhancock Diversified. It trades about 0.06 of its potential returns per unit of risk. Jhancock Diversified Macro is currently generating about 0.02 per unit of risk. If you would invest 996.00 in Franklin Federal Tax Free on December 12, 2024 and sell it today you would earn a total of 85.00 from holding Franklin Federal Tax Free or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Federal Tax Free vs. Jhancock Diversified Macro
Performance |
| Timeline |
| Franklin Federal Tax |
| Jhancock Diversified |
Franklin Federal and Jhancock Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Federal and Jhancock Diversified
The main advantage of trading using opposite Franklin Federal and Jhancock Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Federal position performs unexpectedly, Jhancock Diversified 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 Jhancock Diversified will offset losses from the drop in Jhancock Diversified's long position.| Franklin Federal vs. Pnc Emerging Markets | ||
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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