Correlation Between Ftfa Franklin and American Growth
Can any of the company-specific risk be diversified away by investing in both Ftfa Franklin and American 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 Ftfa Franklin and American Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ftfa Franklin Templeton Growth and American Growth Fund, you can compare the effects of market volatilities on Ftfa Franklin and American 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 Ftfa Franklin with a short position of American Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ftfa Franklin and American Growth.
Diversification Opportunities for Ftfa Franklin and American Growth
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ftfa and American is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ftfa Franklin Templeton Growth and American Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Growth and Ftfa Franklin 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 Ftfa Franklin Templeton Growth are associated (or correlated) with American Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Growth has no effect on the direction of Ftfa Franklin i.e., Ftfa Franklin and American Growth go up and down completely randomly.
Pair Corralation between Ftfa Franklin and American Growth
Assuming the 90 days horizon Ftfa Franklin Templeton Growth is expected to generate 0.58 times more return on investment than American Growth. However, Ftfa Franklin Templeton Growth is 1.72 times less risky than American Growth. It trades about 0.09 of its potential returns per unit of risk. American Growth Fund is currently generating about 0.04 per unit of risk. If you would invest 1,594 in Ftfa Franklin Templeton Growth on September 4, 2024 and sell it today you would earn a total of 532.00 from holding Ftfa Franklin Templeton Growth or generate 33.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ftfa Franklin Templeton Growth vs. American Growth Fund
Performance |
| Timeline |
| Ftfa Franklin Templeton |
| American Growth |
Ftfa Franklin and American Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ftfa Franklin and American Growth
The main advantage of trading using opposite Ftfa Franklin and American Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ftfa Franklin position performs unexpectedly, American 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 American Growth will offset losses from the drop in American Growth's long position.| Ftfa Franklin vs. Franklin Mutual Beacon | Ftfa Franklin vs. Templeton Developing Markets | Ftfa Franklin vs. Franklin Mutual Global | Ftfa Franklin vs. Franklin Mutual Global |
| American Growth vs. American Growth Fund | American Growth vs. American Growth Fund | American Growth vs. American Growth Fund | American Growth vs. Tiaa Cref Large Cap Growth |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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