Correlation Between Franklin Convertible and Allianzgi Convertible
Can any of the company-specific risk be diversified away by investing in both Franklin Convertible and Allianzgi Convertible 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 Convertible and Allianzgi Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Vertible Securities and Allianzgi Vertible Fund, you can compare the effects of market volatilities on Franklin Convertible and Allianzgi Convertible 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 Convertible with a short position of Allianzgi Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Convertible and Allianzgi Convertible.
Diversification Opportunities for Franklin Convertible and Allianzgi Convertible
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Allianzgi is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Vertible Securities and Allianzgi Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Convertible and Franklin Convertible 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 Vertible Securities are associated (or correlated) with Allianzgi Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Convertible has no effect on the direction of Franklin Convertible i.e., Franklin Convertible and Allianzgi Convertible go up and down completely randomly.
Pair Corralation between Franklin Convertible and Allianzgi Convertible
Assuming the 90 days horizon Franklin Vertible Securities is expected to generate 0.89 times more return on investment than Allianzgi Convertible. However, Franklin Vertible Securities is 1.12 times less risky than Allianzgi Convertible. It trades about 0.19 of its potential returns per unit of risk. Allianzgi Vertible Fund is currently generating about 0.17 per unit of risk. If you would invest 1,920 in Franklin Vertible Securities on September 1, 2024 and sell it today you would earn a total of 568.00 from holding Franklin Vertible Securities or generate 29.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.63% |
| Values | Daily Returns |
Franklin Vertible Securities vs. Allianzgi Vertible Fund
Performance |
| Timeline |
| Franklin Convertible |
| Allianzgi Convertible |
Franklin Convertible and Allianzgi Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Convertible and Allianzgi Convertible
The main advantage of trading using opposite Franklin Convertible and Allianzgi Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Convertible position performs unexpectedly, Allianzgi Convertible 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 Convertible will offset losses from the drop in Allianzgi Convertible's long position.| Franklin Convertible vs. Palm Valley Capital | Franklin Convertible vs. Royce Opportunity Fund | Franklin Convertible vs. Heartland Value Plus | Franklin Convertible vs. Boston Partners Small |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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