Correlation Between Ftfa Franklin and Transamerica Large
Can any of the company-specific risk be diversified away by investing in both Ftfa Franklin and Transamerica Large 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 Transamerica Large 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 Transamerica Large Cap, you can compare the effects of market volatilities on Ftfa Franklin and Transamerica Large 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 Transamerica Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ftfa Franklin and Transamerica Large.
Diversification Opportunities for Ftfa Franklin and Transamerica Large
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ftfa and Transamerica is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ftfa Franklin Templeton Growth and Transamerica Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Large 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 Transamerica Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Large Cap has no effect on the direction of Ftfa Franklin i.e., Ftfa Franklin and Transamerica Large go up and down completely randomly.
Pair Corralation between Ftfa Franklin and Transamerica Large
Assuming the 90 days horizon Ftfa Franklin is expected to generate 1.03 times less return on investment than Transamerica Large. But when comparing it to its historical volatility, Ftfa Franklin Templeton Growth is 1.13 times less risky than Transamerica Large. It trades about 0.08 of its potential returns per unit of risk. Transamerica Large Cap is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,136 in Transamerica Large Cap on October 11, 2024 and sell it today you would earn a total of 321.00 from holding Transamerica Large Cap or generate 28.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ftfa Franklin Templeton Growth vs. Transamerica Large Cap
Performance |
| Timeline |
| Ftfa Franklin Templeton |
| Transamerica Large Cap |
Ftfa Franklin and Transamerica Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ftfa Franklin and Transamerica Large
The main advantage of trading using opposite Ftfa Franklin and Transamerica Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ftfa Franklin position performs unexpectedly, Transamerica Large 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 Transamerica Large will offset losses from the drop in Transamerica Large's long position.| Ftfa Franklin vs. Alpine Ultra Short | Ftfa Franklin vs. Abr Enhanced Short | Ftfa Franklin vs. Delaware Investments Ultrashort | Ftfa Franklin vs. Touchstone Ultra Short |
| Transamerica Large vs. Upright Growth Income | Transamerica Large vs. Needham Aggressive Growth | Transamerica Large vs. Ftfa Franklin Templeton Growth | Transamerica Large vs. Small Pany 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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