Correlation Between Franklin Convertible and New Economy
Can any of the company-specific risk be diversified away by investing in both Franklin Convertible and New Economy 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 New Economy 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 New Economy Fund, you can compare the effects of market volatilities on Franklin Convertible and New Economy 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 New Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Convertible and New Economy.
Diversification Opportunities for Franklin Convertible and New Economy
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and New is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Vertible Securities and New Economy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Economy Fund 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 New Economy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Economy Fund has no effect on the direction of Franklin Convertible i.e., Franklin Convertible and New Economy go up and down completely randomly.
Pair Corralation between Franklin Convertible and New Economy
Assuming the 90 days horizon Franklin Vertible Securities is expected to generate 0.34 times more return on investment than New Economy. However, Franklin Vertible Securities is 2.91 times less risky than New Economy. It trades about -0.38 of its potential returns per unit of risk. New Economy Fund is currently generating about -0.18 per unit of risk. If you would invest 2,479 in Franklin Vertible Securities on October 10, 2024 and sell it today you would lose (147.00) from holding Franklin Vertible Securities or give up 5.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Vertible Securities vs. New Economy Fund
Performance |
| Timeline |
| Franklin Convertible |
| New Economy Fund |
Franklin Convertible and New Economy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Convertible and New Economy
The main advantage of trading using opposite Franklin Convertible and New Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Convertible position performs unexpectedly, New Economy 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 New Economy will offset losses from the drop in New Economy'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 |
| New Economy vs. Aqr Large Cap | New Economy vs. Barings Global Floating | New Economy vs. Alliancebernstein Global Highome | New Economy vs. Qs Large 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |