Correlation Between Franklin High and Diversified International
Can any of the company-specific risk be diversified away by investing in both Franklin High and Diversified International 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 Diversified International 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 Diversified International Fund, you can compare the effects of market volatilities on Franklin High and Diversified International 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 Diversified International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Diversified International.
Diversification Opportunities for Franklin High and Diversified International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Diversified is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Income and Diversified International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diversified International 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 Diversified International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diversified International has no effect on the direction of Franklin High i.e., Franklin High and Diversified International go up and down completely randomly.
Pair Corralation between Franklin High and Diversified International
Assuming the 90 days horizon Franklin High Income is expected to generate 0.25 times more return on investment than Diversified International. However, Franklin High Income is 4.02 times less risky than Diversified International. It trades about 0.0 of its potential returns per unit of risk. Diversified International Fund is currently generating about -0.17 per unit of risk. If you would invest 176.00 in Franklin High Income on August 25, 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. Diversified International Fund
Performance |
| Timeline |
| Franklin High Income |
| Diversified International |
Franklin High and Diversified International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Diversified International
The main advantage of trading using opposite Franklin High and Diversified International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Diversified International 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 Diversified International will offset losses from the drop in Diversified International's 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 |
| Diversified International vs. Franklin High Income | Diversified International vs. Artisan High Income | Diversified International vs. Victory High Income | Diversified International vs. Calvert High Yield |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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