Correlation Between Franklin Federal and Virtus Select
Can any of the company-specific risk be diversified away by investing in both Franklin Federal and Virtus Select 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 Virtus Select 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 Virtus Select Mlp, you can compare the effects of market volatilities on Franklin Federal and Virtus Select 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 Virtus Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Federal and Virtus Select.
Diversification Opportunities for Franklin Federal and Virtus Select
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Virtus is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Federal Tax Free and Virtus Select Mlp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Select Mlp 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 Virtus Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Select Mlp has no effect on the direction of Franklin Federal i.e., Franklin Federal and Virtus Select go up and down completely randomly.
Pair Corralation between Franklin Federal and Virtus Select
Assuming the 90 days horizon Franklin Federal Tax Free is expected to under-perform the Virtus Select. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Federal Tax Free is 6.11 times less risky than Virtus Select. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Virtus Select Mlp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,692 in Virtus Select Mlp on November 4, 2024 and sell it today you would earn a total of 12.00 from holding Virtus Select Mlp or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Franklin Federal Tax Free vs. Virtus Select Mlp
Performance |
| Timeline |
| Franklin Federal Tax |
| Virtus Select Mlp |
Franklin Federal and Virtus Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Federal and Virtus Select
The main advantage of trading using opposite Franklin Federal and Virtus Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Federal position performs unexpectedly, Virtus Select 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 Virtus Select will offset losses from the drop in Virtus Select's long position.| Franklin Federal vs. Jhancock Diversified Macro | Franklin Federal vs. Gmo Quality Fund | Franklin Federal vs. Issachar Fund Class | Franklin Federal vs. Schwab Small Cap Index |
| Virtus Select vs. Virtus Convertible | Virtus Select vs. Putnam Convertible Securities | Virtus Select vs. Fidelity Sai Convertible | Virtus Select vs. Absolute Convertible Arbitrage |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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