Correlation Between Franklin Small and Alpine Ultra
Can any of the company-specific risk be diversified away by investing in both Franklin Small and Alpine Ultra 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 Alpine Ultra 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 Alpine Ultra Short, you can compare the effects of market volatilities on Franklin Small and Alpine Ultra 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 Alpine Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Small and Alpine Ultra.
Diversification Opportunities for Franklin Small and Alpine Ultra
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Alpine is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Small Cap and Alpine Ultra Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine Ultra Short 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 Alpine Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine Ultra Short has no effect on the direction of Franklin Small i.e., Franklin Small and Alpine Ultra go up and down completely randomly.
Pair Corralation between Franklin Small and Alpine Ultra
Assuming the 90 days horizon Franklin Small Cap is expected to generate 18.89 times more return on investment than Alpine Ultra. However, Franklin Small is 18.89 times more volatile than Alpine Ultra Short. It trades about 0.05 of its potential returns per unit of risk. Alpine Ultra Short is currently generating about 0.22 per unit of risk. If you would invest 1,267 in Franklin Small Cap on November 6, 2024 and sell it today you would earn a total of 413.00 from holding Franklin Small Cap or generate 32.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Small Cap vs. Alpine Ultra Short
Performance |
| Timeline |
| Franklin Small Cap |
| Alpine Ultra Short |
Franklin Small and Alpine Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Small and Alpine Ultra
The main advantage of trading using opposite Franklin Small and Alpine Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Small position performs unexpectedly, Alpine Ultra 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 Alpine Ultra will offset losses from the drop in Alpine Ultra's long position.| Franklin Small vs. Lebenthal Lisanti Small | Franklin Small vs. Jhvit International Small | Franklin Small vs. Federated Kaufmann Small | Franklin Small vs. Kinetics Small Cap |
| Alpine Ultra vs. Alpine Ultra Short | Alpine Ultra vs. Alpine Dynamic Dividend | Alpine Ultra vs. Alpine Realty Income | Alpine Ultra vs. Alpine Global Infrastructure |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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