Correlation Between Franklin Adjustable and Locorr Dynamic
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Locorr Dynamic 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 Locorr Dynamic 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 Locorr Dynamic Equity, you can compare the effects of market volatilities on Franklin Adjustable and Locorr Dynamic 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 Locorr Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Locorr Dynamic.
Diversification Opportunities for Franklin Adjustable and Locorr Dynamic
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Locorr is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Locorr Dynamic Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Dynamic Equity 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 Locorr Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Dynamic Equity has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Locorr Dynamic go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Locorr Dynamic
Assuming the 90 days horizon Franklin Adjustable Government is expected to generate 0.12 times more return on investment than Locorr Dynamic. However, Franklin Adjustable Government is 8.29 times less risky than Locorr Dynamic. It trades about -0.1 of its potential returns per unit of risk. Locorr Dynamic Equity is currently generating about -0.23 per unit of risk. If you would invest 754.00 in Franklin Adjustable Government on October 12, 2024 and sell it today you would lose (1.00) from holding Franklin Adjustable Government or give up 0.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Locorr Dynamic Equity
Performance |
| Timeline |
| Franklin Adjustable |
| Locorr Dynamic Equity |
Franklin Adjustable and Locorr Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Locorr Dynamic
The main advantage of trading using opposite Franklin Adjustable and Locorr Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Locorr Dynamic 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 Locorr Dynamic will offset losses from the drop in Locorr Dynamic's long position.| Franklin Adjustable vs. Principal Fds Money | Franklin Adjustable vs. Elfun Government Money | Franklin Adjustable vs. Ubs Money Series | Franklin Adjustable vs. Ab Government Exchange |
| Locorr Dynamic vs. Ridgeworth Seix Government | Locorr Dynamic vs. Franklin Adjustable Government | Locorr Dynamic vs. Nationwide Government Bond | Locorr Dynamic vs. Hsbc 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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