Correlation Between Franklin High and Calvert High
Can any of the company-specific risk be diversified away by investing in both Franklin High and Calvert High 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 Calvert High 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 Calvert High Yield, you can compare the effects of market volatilities on Franklin High and Calvert High 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 Calvert High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Calvert High.
Diversification Opportunities for Franklin High and Calvert High
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Calvert is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Income and Calvert High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert High Yield 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 Calvert High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert High Yield has no effect on the direction of Franklin High i.e., Franklin High and Calvert High go up and down completely randomly.
Pair Corralation between Franklin High and Calvert High
Assuming the 90 days horizon Franklin High Income is expected to generate 1.37 times more return on investment than Calvert High. However, Franklin High is 1.37 times more volatile than Calvert High Yield. It trades about 0.12 of its potential returns per unit of risk. Calvert High Yield is currently generating about 0.12 per unit of risk. If you would invest 144.00 in Franklin High Income on August 24, 2024 and sell it today you would earn a total of 32.00 from holding Franklin High Income or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Income vs. Calvert High Yield
Performance |
| Timeline |
| Franklin High Income |
| Calvert High Yield |
Franklin High and Calvert High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Calvert High
The main advantage of trading using opposite Franklin High and Calvert High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Calvert High 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 Calvert High will offset losses from the drop in Calvert High's long position.| Franklin High vs. Prudential High Yield | Franklin High vs. Parametric Modity Strategy | Franklin High vs. HUMANA INC | Franklin High vs. Aquagold International |
| Calvert High vs. Invesco Government Fund | Calvert High vs. Us Government Securities | Calvert High vs. Vanguard Short Term Government | Calvert High vs. Dreyfus Government Cash |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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