Correlation Between Franklin Adjustable and Franklin High
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Franklin High 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 Adjustable and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Adjustable Government and Franklin High Yield, you can compare the effects of market volatilities on Franklin Adjustable and Franklin High 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 Adjustable with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Franklin High.
Diversification Opportunities for Franklin Adjustable and Franklin High
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and Franklin is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Franklin High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Yield and Franklin Adjustable 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 Adjustable Government are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Yield has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Franklin High go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Franklin High
Assuming the 90 days horizon Franklin Adjustable Government is expected to generate 0.41 times more return on investment than Franklin High. However, Franklin Adjustable Government is 2.44 times less risky than Franklin High. It trades about 0.12 of its potential returns per unit of risk. Franklin High Yield is currently generating about 0.05 per unit of risk. If you would invest 700.00 in Franklin Adjustable Government on October 23, 2024 and sell it today you would earn a total of 52.00 from holding Franklin Adjustable Government or generate 7.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Franklin High Yield
Performance |
| Timeline |
| Franklin Adjustable |
| Franklin High Yield |
Franklin Adjustable and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Franklin High
The main advantage of trading using opposite Franklin Adjustable and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Franklin High 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 High will offset losses from the drop in Franklin High's long position.| Franklin Adjustable vs. Lkcm Small Cap | Franklin Adjustable vs. Franklin Small Cap | Franklin Adjustable vs. Kinetics Small Cap | Franklin Adjustable vs. Smallcap Fund Fka |
| Franklin High vs. Cref Money Market | Franklin High vs. Bbh Trust | Franklin High vs. Schwab Government Money | Franklin High vs. Prudential Government Money |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |