Correlation Between Franklin High and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Franklin High and Massmutual Select 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 Massmutual Select 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 Massmutual Select Small, you can compare the effects of market volatilities on Franklin High and Massmutual Select 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 Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Massmutual Select.
Diversification Opportunities for Franklin High and Massmutual Select
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Franklin and Massmutual is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Income and Massmutual Select Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Small 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 Massmutual Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Select Small has no effect on the direction of Franklin High i.e., Franklin High and Massmutual Select go up and down completely randomly.
Pair Corralation between Franklin High and Massmutual Select
Assuming the 90 days horizon Franklin High is expected to generate 97.33 times less return on investment than Massmutual Select. But when comparing it to its historical volatility, Franklin High Income is 3.1 times less risky than Massmutual Select. It trades about 0.0 of its potential returns per unit of risk. Massmutual Select Small is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,036 in Massmutual Select Small on September 13, 2024 and sell it today you would earn a total of 6.00 from holding Massmutual Select Small or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin High Income vs. Massmutual Select Small
Performance |
| Timeline |
| Franklin High Income |
| Massmutual Select Small |
Franklin High and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Massmutual Select
The main advantage of trading using opposite Franklin High and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Massmutual Select 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 Massmutual Select will offset losses from the drop in Massmutual Select's long position.| Franklin High vs. Royce Opportunity Fund | Franklin High vs. Fpa Queens Road | Franklin High vs. Palm Valley Capital | Franklin High vs. Valic Company I |
| Massmutual Select vs. Us High Relative | Massmutual Select vs. Ab Global Risk | Massmutual Select vs. Ppm High Yield | Massmutual Select vs. Franklin High Income |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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