Correlation Between Franklin Floating and Oppenheimer Senior
Can any of the company-specific risk be diversified away by investing in both Franklin Floating and Oppenheimer Senior 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 Floating and Oppenheimer Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Floating Rate and Oppenheimer Senior Floating, you can compare the effects of market volatilities on Franklin Floating and Oppenheimer Senior 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 Floating with a short position of Oppenheimer Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Floating and Oppenheimer Senior.
Diversification Opportunities for Franklin Floating and Oppenheimer Senior
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Oppenheimer is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Floating Rate and Oppenheimer Senior Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Senior and Franklin Floating 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 Floating Rate are associated (or correlated) with Oppenheimer Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Senior has no effect on the direction of Franklin Floating i.e., Franklin Floating and Oppenheimer Senior go up and down completely randomly.
Pair Corralation between Franklin Floating and Oppenheimer Senior
Assuming the 90 days horizon Franklin Floating is expected to generate 1.16 times less return on investment than Oppenheimer Senior. In addition to that, Franklin Floating is 1.31 times more volatile than Oppenheimer Senior Floating. It trades about 0.15 of its total potential returns per unit of risk. Oppenheimer Senior Floating is currently generating about 0.24 per unit of volatility. If you would invest 651.00 in Oppenheimer Senior Floating on October 21, 2024 and sell it today you would earn a total of 7.00 from holding Oppenheimer Senior Floating or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Floating Rate vs. Oppenheimer Senior Floating
Performance |
| Timeline |
| Franklin Floating Rate |
| Oppenheimer Senior |
Franklin Floating and Oppenheimer Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Floating and Oppenheimer Senior
The main advantage of trading using opposite Franklin Floating and Oppenheimer Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Floating position performs unexpectedly, Oppenheimer Senior 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 Oppenheimer Senior will offset losses from the drop in Oppenheimer Senior's long position.| Franklin Floating vs. Franklin Mutual Beacon | Franklin Floating vs. Templeton Developing Markets | Franklin Floating vs. Franklin Mutual Global | Franklin Floating vs. Franklin Mutual Global |
| Oppenheimer Senior vs. Goldman Sachs Financial | Oppenheimer Senior vs. Vanguard Financials Index | Oppenheimer Senior vs. Financials Ultrasector Profund | Oppenheimer Senior vs. 1919 Financial Services |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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