Correlation Between Ftfa Franklin and Jpmorgan Small
Can any of the company-specific risk be diversified away by investing in both Ftfa Franklin and Jpmorgan Small 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 Jpmorgan Small 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 Jpmorgan Small Cap, you can compare the effects of market volatilities on Ftfa Franklin and Jpmorgan Small 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 Jpmorgan Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ftfa Franklin and Jpmorgan Small.
Diversification Opportunities for Ftfa Franklin and Jpmorgan Small
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ftfa and Jpmorgan is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ftfa Franklin Templeton Growth and Jpmorgan Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Small Cap 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 Jpmorgan Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Small Cap has no effect on the direction of Ftfa Franklin i.e., Ftfa Franklin and Jpmorgan Small go up and down completely randomly.
Pair Corralation between Ftfa Franklin and Jpmorgan Small
Assuming the 90 days horizon Ftfa Franklin Templeton Growth is expected to generate 0.43 times more return on investment than Jpmorgan Small. However, Ftfa Franklin Templeton Growth is 2.31 times less risky than Jpmorgan Small. It trades about -0.26 of its potential returns per unit of risk. Jpmorgan Small Cap is currently generating about -0.31 per unit of risk. If you would invest 2,140 in Ftfa Franklin Templeton Growth on October 7, 2024 and sell it today you would lose (91.00) from holding Ftfa Franklin Templeton Growth or give up 4.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ftfa Franklin Templeton Growth vs. Jpmorgan Small Cap
Performance |
| Timeline |
| Ftfa Franklin Templeton |
| Jpmorgan Small Cap |
Ftfa Franklin and Jpmorgan Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ftfa Franklin and Jpmorgan Small
The main advantage of trading using opposite Ftfa Franklin and Jpmorgan Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ftfa Franklin position performs unexpectedly, Jpmorgan Small 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 Jpmorgan Small will offset losses from the drop in Jpmorgan Small'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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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