Correlation Between Ftfa-franklin Templeton and Specialized Technology
Can any of the company-specific risk be diversified away by investing in both Ftfa-franklin Templeton and Specialized Technology 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 Specialized Technology 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 Specialized Technology Fund, you can compare the effects of market volatilities on Ftfa-franklin Templeton and Specialized Technology 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 Specialized Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ftfa-franklin Templeton and Specialized Technology.
Diversification Opportunities for Ftfa-franklin Templeton and Specialized Technology
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ftfa-franklin and Specialized is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ftfa Franklin Templeton Growth and Specialized Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Specialized Technology 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 Specialized Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Specialized Technology has no effect on the direction of Ftfa-franklin Templeton i.e., Ftfa-franklin Templeton and Specialized Technology go up and down completely randomly.
Pair Corralation between Ftfa-franklin Templeton and Specialized Technology
Assuming the 90 days horizon Ftfa Franklin Templeton Growth is expected to generate 0.48 times more return on investment than Specialized Technology. However, Ftfa Franklin Templeton Growth is 2.08 times less risky than Specialized Technology. It trades about 0.09 of its potential returns per unit of risk. Specialized Technology Fund is currently generating about 0.03 per unit of risk. If you would invest 1,990 in Ftfa Franklin Templeton Growth on November 2, 2024 and sell it today you would earn a total of 110.00 from holding Ftfa Franklin Templeton Growth or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.04% |
| Values | Daily Returns |
Ftfa Franklin Templeton Growth vs. Specialized Technology Fund
Performance |
| Timeline |
| Ftfa Franklin Templeton |
| Specialized Technology |
Ftfa-franklin Templeton and Specialized Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ftfa-franklin Templeton and Specialized Technology
The main advantage of trading using opposite Ftfa-franklin Templeton and Specialized Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ftfa-franklin Templeton position performs unexpectedly, Specialized Technology 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 Specialized Technology will offset losses from the drop in Specialized Technology's long position.The idea behind Ftfa Franklin Templeton Growth and Specialized Technology Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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