Correlation Between Franklin Adjustable and Catalyst/millburn
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Catalyst/millburn 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 Catalyst/millburn 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 Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Franklin Adjustable and Catalyst/millburn 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 Catalyst/millburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Catalyst/millburn.
Diversification Opportunities for Franklin Adjustable and Catalyst/millburn
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Catalyst/millburn is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge 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 Catalyst/millburn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmillburn Hedge has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Catalyst/millburn go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Catalyst/millburn
Assuming the 90 days horizon Franklin Adjustable is expected to generate 1.94 times less return on investment than Catalyst/millburn. But when comparing it to its historical volatility, Franklin Adjustable Government is 6.06 times less risky than Catalyst/millburn. It trades about 0.13 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,464 in Catalystmillburn Hedge Strategy on October 28, 2024 and sell it today you would earn a total of 500.00 from holding Catalystmillburn Hedge Strategy or generate 14.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Franklin Adjustable |
| Catalystmillburn Hedge |
Franklin Adjustable and Catalyst/millburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Catalyst/millburn
The main advantage of trading using opposite Franklin Adjustable and Catalyst/millburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Catalyst/millburn 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 Catalyst/millburn will offset losses from the drop in Catalyst/millburn's long position.| Franklin Adjustable vs. Nuveen Mid Cap | Franklin Adjustable vs. Small Midcap Dividend Income | Franklin Adjustable vs. Boyd Watterson Limited | Franklin Adjustable vs. Western Asset Adjustable |
| Catalyst/millburn vs. Hartford Moderate Allocation | Catalyst/millburn vs. T Rowe Price | Catalyst/millburn vs. Balanced Allocation Fund | Catalyst/millburn vs. Pnc Balanced Allocation |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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