Correlation Between Franklin High and Pace High
Can any of the company-specific risk be diversified away by investing in both Franklin High and Pace 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 Pace 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 Pace High Yield, you can compare the effects of market volatilities on Franklin High and Pace 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 Pace High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Pace High.
Diversification Opportunities for Franklin High and Pace High
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Pace is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Income and Pace High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace 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 Pace High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace High Yield has no effect on the direction of Franklin High i.e., Franklin High and Pace High go up and down completely randomly.
Pair Corralation between Franklin High and Pace High
Assuming the 90 days horizon Franklin High Income is expected to generate 1.8 times more return on investment than Pace High. However, Franklin High is 1.8 times more volatile than Pace High Yield. It trades about 0.1 of its potential returns per unit of risk. Pace High Yield is currently generating about 0.11 per unit of risk. If you would invest 175.00 in Franklin High Income on September 3, 2024 and sell it today you would earn a total of 1.00 from holding Franklin High Income or generate 0.57% 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. Pace High Yield
Performance |
| Timeline |
| Franklin High Income |
| Pace High Yield |
Franklin High and Pace High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Pace High
The main advantage of trading using opposite Franklin High and Pace High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Pace 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 Pace High will offset losses from the drop in Pace High's long position.| Franklin High vs. Vanguard High Yield Corporate | Franklin High vs. Vanguard High Yield Porate | Franklin High vs. Blackrock Hi Yld | Franklin High vs. Blackrock High Yield |
| Pace High vs. Global Gold Fund | Pace High vs. Fidelity Advisor Gold | Pace High vs. James Balanced Golden | Pace High vs. Europac Gold Fund |
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.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |