Correlation Between Franklin California and Franklin California
Can any of the company-specific risk be diversified away by investing in both Franklin California and Franklin California 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 California and Franklin California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin California Tax Free and Franklin California Tax Free, you can compare the effects of market volatilities on Franklin California and Franklin California 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 California with a short position of Franklin California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin California and Franklin California.
Diversification Opportunities for Franklin California and Franklin California
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Franklin is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Franklin California Tax Free and Franklin California Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin California Tax and Franklin California 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 California Tax Free are associated (or correlated) with Franklin California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin California Tax has no effect on the direction of Franklin California i.e., Franklin California and Franklin California go up and down completely randomly.
Pair Corralation between Franklin California and Franklin California
Assuming the 90 days horizon Franklin California Tax Free is expected to under-perform the Franklin California. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin California Tax Free is 1.07 times less risky than Franklin California. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Franklin California Tax Free is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 695.00 in Franklin California Tax Free on August 29, 2024 and sell it today you would lose (5.00) from holding Franklin California Tax Free or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
Franklin California Tax Free vs. Franklin California Tax Free
Performance |
| Timeline |
| Franklin California Tax |
| Franklin California Tax |
Franklin California and Franklin California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin California and Franklin California
The main advantage of trading using opposite Franklin California and Franklin California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin California position performs unexpectedly, Franklin California 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 California will offset losses from the drop in Franklin California's long position.The idea behind Franklin California Tax Free and Franklin California Tax Free pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Franklin California vs. Federated Government Ultrashort | Franklin California vs. Gamco Global Telecommunications | Franklin California vs. T Rowe Price | Franklin California vs. Bbh Intermediate Municipal |
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
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |