Correlation Between Franklin High and Prudential Financial
Can any of the company-specific risk be diversified away by investing in both Franklin High and Prudential Financial 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 Prudential Financial 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 Prudential Financial Services, you can compare the effects of market volatilities on Franklin High and Prudential Financial 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 Prudential Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Prudential Financial.
Diversification Opportunities for Franklin High and Prudential Financial
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Prudential is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Income and Prudential Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Financial 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 Prudential Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Financial has no effect on the direction of Franklin High i.e., Franklin High and Prudential Financial go up and down completely randomly.
Pair Corralation between Franklin High and Prudential Financial
Assuming the 90 days horizon Franklin High Income is expected to generate 0.35 times more return on investment than Prudential Financial. However, Franklin High Income is 2.86 times less risky than Prudential Financial. It trades about 0.0 of its potential returns per unit of risk. Prudential Financial Services is currently generating about -0.03 per unit of risk. If you would invest 176.00 in Franklin High Income on September 12, 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 | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin High Income vs. Prudential Financial Services
Performance |
| Timeline |
| Franklin High Income |
| Prudential Financial |
Franklin High and Prudential Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Prudential Financial
The main advantage of trading using opposite Franklin High and Prudential Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Prudential Financial 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 Prudential Financial will offset losses from the drop in Prudential Financial's long position.| Franklin High vs. SCOR PK | Franklin High vs. Morningstar Unconstrained Allocation | Franklin High vs. Via Renewables | Franklin High vs. Bondbloxx ETF Trust |
| Prudential Financial vs. Morningstar Aggressive Growth | Prudential Financial vs. Artisan High Income | Prudential Financial vs. Franklin High Income | Prudential Financial vs. Ab Global Risk |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |