Correlation Between Franklin High and Catalyst Hedged
Can any of the company-specific risk be diversified away by investing in both Franklin High and Catalyst Hedged 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 Franklin High and Catalyst Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin High Income and Catalyst Hedged Modity, you can compare the effects of market volatilities on Franklin High and Catalyst Hedged 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 Franklin High with a short position of Catalyst Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Catalyst Hedged.
Diversification Opportunities for Franklin High and Catalyst Hedged
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Catalyst is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Income and Catalyst Hedged Modity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Hedged Modity and Franklin High 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 Franklin High Income are associated (or correlated) with Catalyst Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Hedged Modity has no effect on the direction of Franklin High i.e., Franklin High and Catalyst Hedged go up and down completely randomly.
Pair Corralation between Franklin High and Catalyst Hedged
Assuming the 90 days horizon Franklin High is expected to generate 27.0 times less return on investment than Catalyst Hedged. But when comparing it to its historical volatility, Franklin High Income is 3.3 times less risky than Catalyst Hedged. It trades about 0.0 of its potential returns per unit of risk. Catalyst Hedged Modity is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 906.00 in Catalyst Hedged Modity on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Catalyst Hedged Modity or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Franklin High Income vs. Catalyst Hedged Modity
Performance |
| Timeline |
| Franklin High Income |
| Catalyst Hedged Modity |
Franklin High and Catalyst Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Catalyst Hedged
The main advantage of trading using opposite Franklin High and Catalyst Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Catalyst Hedged 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 Catalyst Hedged will offset losses from the drop in Catalyst Hedged's long position.| Franklin High vs. Davis Financial Fund | Franklin High vs. 1919 Financial Services | Franklin High vs. Prudential Jennison Financial | Franklin High vs. Gabelli Global Financial |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |