Correlation Between Ftfa Franklin and Mfs Georgia
Can any of the company-specific risk be diversified away by investing in both Ftfa Franklin and Mfs Georgia 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 Mfs Georgia 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 Mfs Georgia Municipal, you can compare the effects of market volatilities on Ftfa Franklin and Mfs Georgia 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 Mfs Georgia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ftfa Franklin and Mfs Georgia.
Diversification Opportunities for Ftfa Franklin and Mfs Georgia
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ftfa and Mfs is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Ftfa Franklin Templeton Growth and Mfs Georgia Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Georgia Municipal 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 Mfs Georgia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Georgia Municipal has no effect on the direction of Ftfa Franklin i.e., Ftfa Franklin and Mfs Georgia go up and down completely randomly.
Pair Corralation between Ftfa Franklin and Mfs Georgia
Assuming the 90 days horizon Ftfa Franklin Templeton Growth is expected to under-perform the Mfs Georgia. In addition to that, Ftfa Franklin is 2.53 times more volatile than Mfs Georgia Municipal. It trades about -0.26 of its total potential returns per unit of risk. Mfs Georgia Municipal is currently generating about -0.31 per unit of volatility. If you would invest 1,027 in Mfs Georgia Municipal on October 7, 2024 and sell it today you would lose (20.00) from holding Mfs Georgia Municipal or give up 1.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ftfa Franklin Templeton Growth vs. Mfs Georgia Municipal
Performance |
| Timeline |
| Ftfa Franklin Templeton |
| Mfs Georgia Municipal |
Ftfa Franklin and Mfs Georgia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ftfa Franklin and Mfs Georgia
The main advantage of trading using opposite Ftfa Franklin and Mfs Georgia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ftfa Franklin position performs unexpectedly, Mfs Georgia 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 Mfs Georgia will offset losses from the drop in Mfs Georgia's long position.| Ftfa Franklin vs. Income Fund Of | Ftfa Franklin vs. Income Fund Of | Ftfa Franklin vs. Income Fund Of | Ftfa Franklin vs. Income Fund Of |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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