Correlation Between Franklin Convertible and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both Franklin Convertible and Aqr Managed 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 Aqr Managed 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 Aqr Managed Futures, you can compare the effects of market volatilities on Franklin Convertible and Aqr Managed 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 Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Convertible and Aqr Managed.
Diversification Opportunities for Franklin Convertible and Aqr Managed
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Aqr is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Vertible Securities and Aqr Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Managed Futures 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 Aqr Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Managed Futures has no effect on the direction of Franklin Convertible i.e., Franklin Convertible and Aqr Managed go up and down completely randomly.
Pair Corralation between Franklin Convertible and Aqr Managed
Assuming the 90 days horizon Franklin Convertible is expected to generate 1.13 times less return on investment than Aqr Managed. But when comparing it to its historical volatility, Franklin Vertible Securities is 1.76 times less risky than Aqr Managed. It trades about 0.06 of its potential returns per unit of risk. Aqr Managed Futures is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 715.00 in Aqr Managed Futures on October 11, 2024 and sell it today you would earn a total of 132.00 from holding Aqr Managed Futures or generate 18.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Vertible Securities vs. Aqr Managed Futures
Performance |
| Timeline |
| Franklin Convertible |
| Aqr Managed Futures |
Franklin Convertible and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Convertible and Aqr Managed
The main advantage of trading using opposite Franklin Convertible and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Convertible position performs unexpectedly, Aqr Managed 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 Aqr Managed will offset losses from the drop in Aqr Managed'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 |
| Aqr Managed vs. Columbia Convertible Securities | Aqr Managed vs. Franklin Vertible Securities | Aqr Managed vs. Victory Incore Investment | Aqr Managed vs. Allianzgi Convertible 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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