Correlation Between Franklin High and Mutual Of
Can any of the company-specific risk be diversified away by investing in both Franklin High and Mutual Of 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 Mutual Of 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 Mutual Of America, you can compare the effects of market volatilities on Franklin High and Mutual Of 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 Mutual Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Mutual Of.
Diversification Opportunities for Franklin High and Mutual Of
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Mutual is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Income and Mutual Of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mutual Of America 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 Mutual Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mutual Of America has no effect on the direction of Franklin High i.e., Franklin High and Mutual Of go up and down completely randomly.
Pair Corralation between Franklin High and Mutual Of
Assuming the 90 days horizon Franklin High is expected to generate 717.0 times less return on investment than Mutual Of. But when comparing it to its historical volatility, Franklin High Income is 3.9 times less risky than Mutual Of. It trades about 0.0 of its potential returns per unit of risk. Mutual Of America is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,500 in Mutual Of America on August 30, 2024 and sell it today you would earn a total of 124.00 from holding Mutual Of America or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Franklin High Income vs. Mutual Of America
Performance |
| Timeline |
| Franklin High Income |
| Mutual Of America |
Franklin High and Mutual Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Mutual Of
The main advantage of trading using opposite Franklin High and Mutual Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Mutual Of 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 Mutual Of will offset losses from the drop in Mutual Of's long position.| Franklin High vs. Gabelli Global Financial | Franklin High vs. Mesirow Financial Small | Franklin High vs. 1919 Financial Services | Franklin High vs. First Trust Specialty |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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