Correlation Between Franklin Small and Putnam Money
Can any of the company-specific risk be diversified away by investing in both Franklin Small and Putnam Money 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 Putnam Money 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 Putnam Money Market, you can compare the effects of market volatilities on Franklin Small and Putnam Money 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 Putnam Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Small and Putnam Money.
Diversification Opportunities for Franklin Small and Putnam Money
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Putnam is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Small Cap and Putnam Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Money Market 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 Putnam Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Money Market has no effect on the direction of Franklin Small i.e., Franklin Small and Putnam Money go up and down completely randomly.
Pair Corralation between Franklin Small and Putnam Money
If you would invest 1,553 in Franklin Small Cap on October 22, 2024 and sell it today you would earn a total of 98.00 from holding Franklin Small Cap or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 96.83% |
| Values | Daily Returns |
Franklin Small Cap vs. Putnam Money Market
Performance |
| Timeline |
| Franklin Small Cap |
| Putnam Money Market |
Franklin Small and Putnam Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Small and Putnam Money
The main advantage of trading using opposite Franklin Small and Putnam Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Small position performs unexpectedly, Putnam Money 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 Putnam Money will offset losses from the drop in Putnam Money's long position.| Franklin Small vs. Short Precious Metals | Franklin Small vs. First Eagle Gold | Franklin Small vs. Gabelli Gold Fund | Franklin Small vs. First Eagle Gold |
| Putnam Money vs. Franklin Small Cap | Putnam Money vs. Glg Intl Small | Putnam Money vs. Ab Small Cap | Putnam Money vs. Lkcm 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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