Correlation Between Ftfa Franklin and Virtus Ceredex
Can any of the company-specific risk be diversified away by investing in both Ftfa Franklin and Virtus Ceredex 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 Virtus Ceredex 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 Virtus Ceredex Small Cap, you can compare the effects of market volatilities on Ftfa Franklin and Virtus Ceredex 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 Virtus Ceredex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ftfa Franklin and Virtus Ceredex.
Diversification Opportunities for Ftfa Franklin and Virtus Ceredex
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ftfa and Virtus is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ftfa Franklin Templeton Growth and Virtus Ceredex Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Ceredex Small 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 Virtus Ceredex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Ceredex Small has no effect on the direction of Ftfa Franklin i.e., Ftfa Franklin and Virtus Ceredex go up and down completely randomly.
Pair Corralation between Ftfa Franklin and Virtus Ceredex
Assuming the 90 days horizon Ftfa Franklin is expected to generate 1.64 times less return on investment than Virtus Ceredex. But when comparing it to its historical volatility, Ftfa Franklin Templeton Growth is 2.15 times less risky than Virtus Ceredex. It trades about 0.16 of its potential returns per unit of risk. Virtus Ceredex Small Cap is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 831.00 in Virtus Ceredex Small Cap on September 3, 2024 and sell it today you would earn a total of 74.00 from holding Virtus Ceredex Small Cap or generate 8.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ftfa Franklin Templeton Growth vs. Virtus Ceredex Small Cap
Performance |
| Timeline |
| Ftfa Franklin Templeton |
| Virtus Ceredex Small |
Ftfa Franklin and Virtus Ceredex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ftfa Franklin and Virtus Ceredex
The main advantage of trading using opposite Ftfa Franklin and Virtus Ceredex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ftfa Franklin position performs unexpectedly, Virtus Ceredex 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 Virtus Ceredex will offset losses from the drop in Virtus Ceredex's long position.| Ftfa Franklin vs. American Funds The | Ftfa Franklin vs. American Funds The | Ftfa Franklin vs. Income Fund Of | Ftfa Franklin vs. Income Fund Of |
| Virtus Ceredex vs. L Abbett Growth | Virtus Ceredex vs. Tfa Alphagen Growth | Virtus Ceredex vs. Rational Defensive Growth | Virtus Ceredex vs. Ftfa Franklin Templeton 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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