Correlation Between Franklin Adjustable and Lkcm Small
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Lkcm Small 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 Lkcm Small 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 Lkcm Small Cap, you can compare the effects of market volatilities on Franklin Adjustable and Lkcm Small 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 Lkcm Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Lkcm Small.
Diversification Opportunities for Franklin Adjustable and Lkcm Small
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Lkcm is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Lkcm Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Small Cap 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 Lkcm Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Small Cap has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Lkcm Small go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Lkcm Small
Assuming the 90 days horizon Franklin Adjustable Government is not expected to generate positive returns. However, Franklin Adjustable Government is 12.32 times less risky than Lkcm Small. It waists most of its returns potential to compensate for thr risk taken. Lkcm Small is generating about 0.12 per unit of risk. If you would invest 2,095 in Lkcm Small Cap on November 3, 2024 and sell it today you would earn a total of 48.00 from holding Lkcm Small Cap or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Lkcm Small Cap
Performance |
| Timeline |
| Franklin Adjustable |
| Lkcm Small Cap |
Franklin Adjustable and Lkcm Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Lkcm Small
The main advantage of trading using opposite Franklin Adjustable and Lkcm Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Lkcm Small 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 Lkcm Small will offset losses from the drop in Lkcm Small's long position.| Franklin Adjustable vs. Vanguard Growth And | Franklin Adjustable vs. Tfa Alphagen Growth | Franklin Adjustable vs. Growth Portfolio Class | Franklin Adjustable vs. Pace Large Growth |
| Lkcm Small vs. Fulcrum Diversified Absolute | Lkcm Small vs. Jhancock Diversified Macro | Lkcm Small vs. Stone Ridge Diversified | Lkcm Small vs. Wilmington Diversified 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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