Correlation Between Franklin Small and Allianzgi Diversified
Can any of the company-specific risk be diversified away by investing in both Franklin Small and Allianzgi Diversified 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 Allianzgi Diversified 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 Allianzgi Diversified Income, you can compare the effects of market volatilities on Franklin Small and Allianzgi Diversified 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 Allianzgi Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Small and Allianzgi Diversified.
Diversification Opportunities for Franklin Small and Allianzgi Diversified
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Allianzgi is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Small Cap and Allianzgi Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Diversified 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 Allianzgi Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Diversified has no effect on the direction of Franklin Small i.e., Franklin Small and Allianzgi Diversified go up and down completely randomly.
Pair Corralation between Franklin Small and Allianzgi Diversified
Assuming the 90 days horizon Franklin Small Cap is expected to generate 1.03 times more return on investment than Allianzgi Diversified. However, Franklin Small is 1.03 times more volatile than Allianzgi Diversified Income. It trades about 0.05 of its potential returns per unit of risk. Allianzgi Diversified Income is currently generating about -0.04 per unit of risk. If you would invest 1,617 in Franklin Small Cap on October 19, 2024 and sell it today you would earn a total of 34.00 from holding Franklin Small Cap or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Small Cap vs. Allianzgi Diversified Income
Performance |
| Timeline |
| Franklin Small Cap |
| Allianzgi Diversified |
Franklin Small and Allianzgi Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Small and Allianzgi Diversified
The main advantage of trading using opposite Franklin Small and Allianzgi Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Small position performs unexpectedly, Allianzgi Diversified 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 Allianzgi Diversified will offset losses from the drop in Allianzgi Diversified's long position.| Franklin Small vs. Hunter Small Cap | Franklin Small vs. Tax Managed Mid Small | Franklin Small vs. Sp Smallcap 600 | Franklin Small vs. Needham Small Cap |
| Allianzgi Diversified vs. Ab Small Cap | Allianzgi Diversified vs. Franklin Small Cap | Allianzgi Diversified vs. Champlain Small | Allianzgi Diversified 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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