Correlation Between Franklin Adjustable and Needham Aggressive
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Needham Aggressive 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 Needham Aggressive 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 Needham Aggressive Growth, you can compare the effects of market volatilities on Franklin Adjustable and Needham Aggressive 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 Needham Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Needham Aggressive.
Diversification Opportunities for Franklin Adjustable and Needham Aggressive
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Needham is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Needham Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Needham Aggressive Growth 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 Needham Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Needham Aggressive Growth has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Needham Aggressive go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Needham Aggressive
Assuming the 90 days horizon Franklin Adjustable is expected to generate 6.6 times less return on investment than Needham Aggressive. But when comparing it to its historical volatility, Franklin Adjustable Government is 11.55 times less risky than Needham Aggressive. It trades about 0.13 of its potential returns per unit of risk. Needham Aggressive Growth is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,307 in Needham Aggressive Growth on October 11, 2024 and sell it today you would earn a total of 1,777 from holding Needham Aggressive Growth or generate 53.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Needham Aggressive Growth
Performance |
| Timeline |
| Franklin Adjustable |
| Needham Aggressive Growth |
Franklin Adjustable and Needham Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Needham Aggressive
The main advantage of trading using opposite Franklin Adjustable and Needham Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Needham Aggressive 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 Needham Aggressive will offset losses from the drop in Needham Aggressive's long position.| Franklin Adjustable vs. Needham Aggressive Growth | Franklin Adjustable vs. Small Pany Growth | Franklin Adjustable vs. Rational Defensive Growth | Franklin Adjustable vs. T Rowe Price |
| Needham Aggressive vs. Needham Aggressive Growth | Needham Aggressive vs. Needham Small Cap | Needham Aggressive vs. Ultramid Cap Profund Ultramid Cap | Needham Aggressive vs. Fidelity Advisor Semiconductors |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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