Correlation Between Ftfa-franklin Templeton and American Funds
Can any of the company-specific risk be diversified away by investing in both Ftfa-franklin Templeton and American Funds 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 Templeton and American Funds 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 Funds 2015, you can compare the effects of market volatilities on Ftfa-franklin Templeton and American Funds 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 Templeton with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ftfa-franklin Templeton and American Funds.
Diversification Opportunities for Ftfa-franklin Templeton and American Funds
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ftfa-franklin and American is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ftfa Franklin Templeton Growth and American Funds 2015 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2015 and Ftfa-franklin Templeton 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 Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2015 has no effect on the direction of Ftfa-franklin Templeton i.e., Ftfa-franklin Templeton and American Funds go up and down completely randomly.
Pair Corralation between Ftfa-franklin Templeton and American Funds
Assuming the 90 days horizon Ftfa Franklin Templeton Growth is expected to generate 1.67 times more return on investment than American Funds. However, Ftfa-franklin Templeton is 1.67 times more volatile than American Funds 2015. It trades about 0.09 of its potential returns per unit of risk. American Funds 2015 is currently generating about 0.07 per unit of risk. If you would invest 1,622 in Ftfa Franklin Templeton Growth on October 25, 2024 and sell it today you would earn a total of 476.00 from holding Ftfa Franklin Templeton Growth or generate 29.35% 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 Funds 2015
Performance |
| Timeline |
| Ftfa Franklin Templeton |
| American Funds 2015 |
Ftfa-franklin Templeton and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ftfa-franklin Templeton and American Funds
The main advantage of trading using opposite Ftfa-franklin Templeton and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ftfa-franklin Templeton position performs unexpectedly, American Funds 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 Funds will offset losses from the drop in American Funds' long position.| Ftfa-franklin Templeton vs. Simt Real Estate | Ftfa-franklin Templeton vs. Redwood Real Estate | Ftfa-franklin Templeton vs. Short Real Estate | Ftfa-franklin Templeton vs. Prudential Real Estate |
| American Funds vs. Virtus High Yield | American Funds vs. Prudential High Yield | American Funds vs. Transamerica High Yield | American Funds vs. Msift High Yield |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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