Correlation Between Franklin Convertible and Fulcrum Diversified
Can any of the company-specific risk be diversified away by investing in both Franklin Convertible and Fulcrum 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 Convertible and Fulcrum Diversified 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 Fulcrum Diversified Absolute, you can compare the effects of market volatilities on Franklin Convertible and Fulcrum 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 Convertible with a short position of Fulcrum Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Convertible and Fulcrum Diversified.
Diversification Opportunities for Franklin Convertible and Fulcrum Diversified
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Fulcrum is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Vertible Securities and Fulcrum Diversified Absolute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulcrum Diversified 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 Fulcrum Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulcrum Diversified has no effect on the direction of Franklin Convertible i.e., Franklin Convertible and Fulcrum Diversified go up and down completely randomly.
Pair Corralation between Franklin Convertible and Fulcrum Diversified
Assuming the 90 days horizon Franklin Vertible Securities is expected to under-perform the Fulcrum Diversified. In addition to that, Franklin Convertible is 1.91 times more volatile than Fulcrum Diversified Absolute. It trades about -0.37 of its total potential returns per unit of risk. Fulcrum Diversified Absolute is currently generating about -0.28 per unit of volatility. If you would invest 956.00 in Fulcrum Diversified Absolute on October 10, 2024 and sell it today you would lose (23.00) from holding Fulcrum Diversified Absolute or give up 2.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Vertible Securities vs. Fulcrum Diversified Absolute
Performance |
| Timeline |
| Franklin Convertible |
| Fulcrum Diversified |
Franklin Convertible and Fulcrum Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Convertible and Fulcrum Diversified
The main advantage of trading using opposite Franklin Convertible and Fulcrum Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Convertible position performs unexpectedly, Fulcrum 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 Fulcrum Diversified will offset losses from the drop in Fulcrum Diversified's long position.| Franklin Convertible vs. 1919 Financial Services | Franklin Convertible vs. Fidelity Advisor Financial | Franklin Convertible vs. Icon Financial Fund | Franklin Convertible vs. Angel Oak Financial |
| Fulcrum Diversified vs. Federated Hermes Conservative | Fulcrum Diversified vs. Stone Ridge Diversified | Fulcrum Diversified vs. Madison Diversified Income | Fulcrum Diversified vs. Pimco Diversified Income |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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