Correlation Between Franklin Balanced and Us Government
Can any of the company-specific risk be diversified away by investing in both Franklin Balanced and Us Government 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 Balanced and Us Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Balanced Fund and Us Government Securities, you can compare the effects of market volatilities on Franklin Balanced and Us Government 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 Balanced with a short position of Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Balanced and Us Government.
Diversification Opportunities for Franklin Balanced and Us Government
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and RGVJX is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Balanced Fund and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities and Franklin Balanced 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 Balanced Fund are associated (or correlated) with Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Franklin Balanced i.e., Franklin Balanced and Us Government go up and down completely randomly.
Pair Corralation between Franklin Balanced and Us Government
Assuming the 90 days horizon Franklin Balanced Fund is expected to generate 1.05 times more return on investment than Us Government. However, Franklin Balanced is 1.05 times more volatile than Us Government Securities. It trades about 0.12 of its potential returns per unit of risk. Us Government Securities is currently generating about 0.05 per unit of risk. If you would invest 1,153 in Franklin Balanced Fund on September 4, 2024 and sell it today you would earn a total of 134.00 from holding Franklin Balanced Fund or generate 11.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Balanced Fund vs. Us Government Securities
Performance |
| Timeline |
| Franklin Balanced |
| Us Government Securities |
Franklin Balanced and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Balanced and Us Government
The main advantage of trading using opposite Franklin Balanced and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Balanced position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government's long position.| Franklin Balanced vs. Franklin Mutual Beacon | Franklin Balanced vs. Templeton Developing Markets | Franklin Balanced vs. Franklin Mutual Global | Franklin Balanced vs. Franklin Mutual Global |
| Us Government vs. Victory Rs Partners | Us Government vs. Hennessy Nerstone Mid | Us Government vs. Mutual Of America | Us Government vs. Ultramid Cap Profund Ultramid Cap |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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