Correlation Between Franklin Floating and Wesmark Growth
Can any of the company-specific risk be diversified away by investing in both Franklin Floating and Wesmark Growth 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 Wesmark Growth 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 Wesmark Growth Fund, you can compare the effects of market volatilities on Franklin Floating and Wesmark Growth 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 Wesmark Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Floating and Wesmark Growth.
Diversification Opportunities for Franklin Floating and Wesmark Growth
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Wesmark is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Floating Rate and Wesmark Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesmark Growth 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 Wesmark Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesmark Growth has no effect on the direction of Franklin Floating i.e., Franklin Floating and Wesmark Growth go up and down completely randomly.
Pair Corralation between Franklin Floating and Wesmark Growth
Assuming the 90 days horizon Franklin Floating Rate is expected to generate 0.15 times more return on investment than Wesmark Growth. However, Franklin Floating Rate is 6.7 times less risky than Wesmark Growth. It trades about 0.07 of its potential returns per unit of risk. Wesmark Growth Fund is currently generating about -0.03 per unit of risk. If you would invest 712.00 in Franklin Floating Rate on January 16, 2025 and sell it today you would earn a total of 30.00 from holding Franklin Floating Rate or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Floating Rate vs. Wesmark Growth Fund
Performance |
| Timeline |
| Franklin Floating Rate |
| Wesmark Growth |
Franklin Floating and Wesmark Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Floating and Wesmark Growth
The main advantage of trading using opposite Franklin Floating and Wesmark Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Floating position performs unexpectedly, Wesmark Growth 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 Wesmark Growth will offset losses from the drop in Wesmark Growth's long position.| Franklin Floating vs. Ab High Income | Franklin Floating vs. Calvert Aggressive Allocation | Franklin Floating vs. T Rowe Price | Franklin Floating vs. Blackrock High Income |
| Wesmark Growth vs. Wesmark Small Pany | Wesmark Growth vs. Wesmark Government Bond | Wesmark Growth vs. Wesmark Balanced Fund | Wesmark Growth vs. Wesmark West Virginia |
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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