Correlation Between Franklin Adjustable and Great West
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Great West 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 Great West 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 Great West Loomis Sayles, you can compare the effects of market volatilities on Franklin Adjustable and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Great West.
Diversification Opportunities for Franklin Adjustable and Great West
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Great is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Great West Loomis Sayles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Loomis 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Loomis has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Great West go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Great West
Assuming the 90 days horizon Franklin Adjustable is expected to generate 23.82 times less return on investment than Great West. But when comparing it to its historical volatility, Franklin Adjustable Government is 11.81 times less risky than Great West. It trades about 0.08 of its potential returns per unit of risk. Great West Loomis Sayles is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 3,833 in Great West Loomis Sayles on November 8, 2024 and sell it today you would earn a total of 127.00 from holding Great West Loomis Sayles or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Great West Loomis Sayles
Performance |
| Timeline |
| Franklin Adjustable |
| Great West Loomis |
Franklin Adjustable and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Great West
The main advantage of trading using opposite Franklin Adjustable and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West's long position.| Franklin Adjustable vs. Gmo Global Equity | Franklin Adjustable vs. Barings Global Floating | Franklin Adjustable vs. Aqr Global Macro | Franklin Adjustable vs. Ab Global Bond |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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