Correlation Between Franklin High and Fabxx
Can any of the company-specific risk be diversified away by investing in both Franklin High and Fabxx 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 Fabxx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin High Yield and Fabxx, you can compare the effects of market volatilities on Franklin High and Fabxx 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 Fabxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Fabxx.
Diversification Opportunities for Franklin High and Fabxx
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Fabxx is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Fabxx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fabxx 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 Yield are associated (or correlated) with Fabxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fabxx has no effect on the direction of Franklin High i.e., Franklin High and Fabxx go up and down completely randomly.
Pair Corralation between Franklin High and Fabxx
Assuming the 90 days horizon Franklin High Yield is expected to generate 0.02 times more return on investment than Fabxx. However, Franklin High Yield is 50.01 times less risky than Fabxx. It trades about 0.2 of its potential returns per unit of risk. Fabxx is currently generating about -0.31 per unit of risk. If you would invest 919.00 in Franklin High Yield on September 13, 2024 and sell it today you would earn a total of 7.00 from holding Franklin High Yield or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Yield vs. Fabxx
Performance |
| Timeline |
| Franklin High Yield |
| Fabxx |
Franklin High and Fabxx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Fabxx
The main advantage of trading using opposite Franklin High and Fabxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Fabxx 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 Fabxx will offset losses from the drop in Fabxx's long position.| Franklin High vs. Gabelli Convertible And | Franklin High vs. Allianzgi Convertible Income | Franklin High vs. Lord Abbett Convertible | Franklin High vs. Advent Claymore Convertible |
| Fabxx vs. Vanguard Total Stock | Fabxx vs. Vanguard 500 Index | Fabxx vs. Vanguard Total Stock | Fabxx vs. Vanguard Total Stock |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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