Correlation Between Franklin High and Leggmason Partners
Can any of the company-specific risk be diversified away by investing in both Franklin High and Leggmason Partners 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 Leggmason Partners 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 Leggmason Partners Institutional, you can compare the effects of market volatilities on Franklin High and Leggmason Partners 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 Leggmason Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Leggmason Partners.
Diversification Opportunities for Franklin High and Leggmason Partners
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Leggmason is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Income and Leggmason Partners Institution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leggmason Partners 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 Leggmason Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leggmason Partners has no effect on the direction of Franklin High i.e., Franklin High and Leggmason Partners go up and down completely randomly.
Pair Corralation between Franklin High and Leggmason Partners
If you would invest 175.00 in Franklin High Income on September 24, 2024 and sell it today you would earn a total of 0.00 from holding Franklin High Income or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Income vs. Leggmason Partners Institution
Performance |
| Timeline |
| Franklin High Income |
| Leggmason Partners |
Franklin High and Leggmason Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Leggmason Partners
The main advantage of trading using opposite Franklin High and Leggmason Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Leggmason Partners 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 Leggmason Partners will offset losses from the drop in Leggmason Partners' long position.| Franklin High vs. Franklin Mutual Beacon | Franklin High vs. Templeton Developing Markets | Franklin High vs. Franklin Mutual Global | Franklin High vs. Franklin Mutual Global |
| Leggmason Partners vs. Vanguard Total Stock | Leggmason Partners vs. Vanguard 500 Index | Leggmason Partners vs. Vanguard Total Stock | Leggmason Partners vs. Vanguard Total Stock |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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