Correlation Between Franklin Federal and Strategic Advisers
Can any of the company-specific risk be diversified away by investing in both Franklin Federal and Strategic Advisers 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 Federal and Strategic Advisers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Federal Tax Free and Strategic Advisers Municipal, you can compare the effects of market volatilities on Franklin Federal and Strategic Advisers 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 Federal with a short position of Strategic Advisers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Federal and Strategic Advisers.
Diversification Opportunities for Franklin Federal and Strategic Advisers
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Franklin and Strategic is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Federal Tax Free and Strategic Advisers Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Advisers and Franklin Federal 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 Federal Tax Free are associated (or correlated) with Strategic Advisers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Advisers has no effect on the direction of Franklin Federal i.e., Franklin Federal and Strategic Advisers go up and down completely randomly.
Pair Corralation between Franklin Federal and Strategic Advisers
Assuming the 90 days horizon Franklin Federal is expected to generate 1.22 times less return on investment than Strategic Advisers. In addition to that, Franklin Federal is 1.06 times more volatile than Strategic Advisers Municipal. It trades about 0.05 of its total potential returns per unit of risk. Strategic Advisers Municipal is currently generating about 0.06 per unit of volatility. If you would invest 820.00 in Strategic Advisers Municipal on October 25, 2024 and sell it today you would earn a total of 64.00 from holding Strategic Advisers Municipal or generate 7.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Federal Tax Free vs. Strategic Advisers Municipal
Performance |
| Timeline |
| Franklin Federal Tax |
| Strategic Advisers |
Franklin Federal and Strategic Advisers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Federal and Strategic Advisers
The main advantage of trading using opposite Franklin Federal and Strategic Advisers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Federal position performs unexpectedly, Strategic Advisers 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 Strategic Advisers will offset losses from the drop in Strategic Advisers' long position.| Franklin Federal vs. Pimco Energy Tactical | Franklin Federal vs. Salient Mlp Energy | Franklin Federal vs. Vanguard Energy Index | Franklin Federal vs. Fidelity Advisor Energy |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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