Correlation Between Franklin Small and Amg Managers
Can any of the company-specific risk be diversified away by investing in both Franklin Small and Amg Managers 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 Small and Amg Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Small Cap and Amg Managers Doubleline, you can compare the effects of market volatilities on Franklin Small and Amg Managers 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 Small with a short position of Amg Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Small and Amg Managers.
Diversification Opportunities for Franklin Small and Amg Managers
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Amg is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Small Cap and Amg Managers Doubleline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Managers Doubleline and Franklin Small 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 Small Cap are associated (or correlated) with Amg Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Managers Doubleline has no effect on the direction of Franklin Small i.e., Franklin Small and Amg Managers go up and down completely randomly.
Pair Corralation between Franklin Small and Amg Managers
Assuming the 90 days horizon Franklin Small Cap is expected to generate 3.79 times more return on investment than Amg Managers. However, Franklin Small is 3.79 times more volatile than Amg Managers Doubleline. It trades about 0.11 of its potential returns per unit of risk. Amg Managers Doubleline is currently generating about -0.04 per unit of risk. If you would invest 1,564 in Franklin Small Cap on October 26, 2024 and sell it today you would earn a total of 125.00 from holding Franklin Small Cap or generate 7.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Small Cap vs. Amg Managers Doubleline
Performance |
| Timeline |
| Franklin Small Cap |
| Amg Managers Doubleline |
Franklin Small and Amg Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Small and Amg Managers
The main advantage of trading using opposite Franklin Small and Amg Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Small position performs unexpectedly, Amg Managers 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 Amg Managers will offset losses from the drop in Amg Managers' long position.| Franklin Small vs. Black Oak Emerging | Franklin Small vs. Investec Emerging Markets | Franklin Small vs. Balanced Strategy Fund | Franklin Small vs. Angel Oak Multi Strategy |
| Amg Managers vs. Hunter Small Cap | Amg Managers vs. Goldman Sachs Smallmid | Amg Managers vs. Franklin Small Cap | Amg Managers vs. Ab Small Cap |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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