Correlation Between Franklin Convertible and Adirondack Small
Can any of the company-specific risk be diversified away by investing in both Franklin Convertible and Adirondack Small 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 Adirondack Small 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 Adirondack Small Cap, you can compare the effects of market volatilities on Franklin Convertible and Adirondack Small 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 Adirondack Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Convertible and Adirondack Small.
Diversification Opportunities for Franklin Convertible and Adirondack Small
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Adirondack is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Vertible Securities and Adirondack Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adirondack Small Cap 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 Adirondack Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adirondack Small Cap has no effect on the direction of Franklin Convertible i.e., Franklin Convertible and Adirondack Small go up and down completely randomly.
Pair Corralation between Franklin Convertible and Adirondack Small
Assuming the 90 days horizon Franklin Convertible is expected to generate 1.62 times less return on investment than Adirondack Small. But when comparing it to its historical volatility, Franklin Vertible Securities is 2.12 times less risky than Adirondack Small. It trades about 0.11 of its potential returns per unit of risk. Adirondack Small Cap is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,594 in Adirondack Small Cap on October 20, 2024 and sell it today you would earn a total of 630.00 from holding Adirondack Small Cap or generate 24.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Vertible Securities vs. Adirondack Small Cap
Performance |
| Timeline |
| Franklin Convertible |
| Adirondack Small Cap |
Franklin Convertible and Adirondack Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Convertible and Adirondack Small
The main advantage of trading using opposite Franklin Convertible and Adirondack Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Convertible position performs unexpectedly, Adirondack Small 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 Adirondack Small will offset losses from the drop in Adirondack Small's long position.| Franklin Convertible vs. Legg Mason Global | Franklin Convertible vs. Rbc Global Equity | Franklin Convertible vs. Us Global Investors | Franklin Convertible vs. T Rowe Price |
| Adirondack Small vs. Wp Large Cap | Adirondack Small vs. Franklin Vertible Securities | Adirondack Small vs. Dunham Monthly Distribution | Adirondack Small vs. Blackrock Low Duration |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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