Correlation Between Franklin Adjustable and Regional Bank
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Regional Bank 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 Regional Bank 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 Regional Bank Fund, you can compare the effects of market volatilities on Franklin Adjustable and Regional Bank 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 Regional Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Regional Bank.
Diversification Opportunities for Franklin Adjustable and Regional Bank
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Regional is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Regional Bank Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Bank 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 Regional Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Bank has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Regional Bank go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Regional Bank
Assuming the 90 days horizon Franklin Adjustable Government is not expected to generate positive returns. However, Franklin Adjustable Government is 17.21 times less risky than Regional Bank. It waists most of its returns potential to compensate for thr risk taken. Regional Bank is generating about 0.2 per unit of risk. If you would invest 2,668 in Regional Bank Fund on November 7, 2024 and sell it today you would earn a total of 132.00 from holding Regional Bank Fund or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Regional Bank Fund
Performance |
| Timeline |
| Franklin Adjustable |
| Regional Bank |
Franklin Adjustable and Regional Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Regional Bank
The main advantage of trading using opposite Franklin Adjustable and Regional Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Regional Bank 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 Regional Bank will offset losses from the drop in Regional Bank's long position.| Franklin Adjustable vs. Franklin Mutual Beacon | Franklin Adjustable vs. Templeton Developing Markets | Franklin Adjustable vs. Franklin Mutual Global | Franklin Adjustable vs. Franklin Mutual Global |
| Regional Bank vs. Ab Global Bond | Regional Bank vs. Baird Quality Intermediate | Regional Bank vs. T Rowe Price | Regional Bank vs. Artisan High Income |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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