Correlation Between Franklin High and William Blair
Can any of the company-specific risk be diversified away by investing in both Franklin High and William Blair 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 William Blair 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 William Blair Small, you can compare the effects of market volatilities on Franklin High and William Blair 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 William Blair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and William Blair.
Diversification Opportunities for Franklin High and William Blair
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and William is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Income and William Blair Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on William Blair 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 William Blair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of William Blair Small has no effect on the direction of Franklin High i.e., Franklin High and William Blair go up and down completely randomly.
Pair Corralation between Franklin High and William Blair
Assuming the 90 days horizon Franklin High is expected to generate 2.54 times less return on investment than William Blair. But when comparing it to its historical volatility, Franklin High Income is 5.89 times less risky than William Blair. It trades about 0.16 of its potential returns per unit of risk. William Blair Small is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,956 in William Blair Small on August 26, 2024 and sell it today you would earn a total of 336.00 from holding William Blair Small or generate 11.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Income vs. William Blair Small
Performance |
| Timeline |
| Franklin High Income |
| William Blair Small |
Franklin High and William Blair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and William Blair
The main advantage of trading using opposite Franklin High and William Blair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, William Blair 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 William Blair will offset losses from the drop in William Blair'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 |
| William Blair vs. Pace High Yield | William Blair vs. Franklin High Income | William Blair vs. Metropolitan West High | William Blair vs. Morningstar Aggressive Growth |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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