Correlation Between Franklin High and Fidelity Flex
Can any of the company-specific risk be diversified away by investing in both Franklin High and Fidelity Flex 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 Fidelity Flex 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 Fidelity Flex Freedom, you can compare the effects of market volatilities on Franklin High and Fidelity Flex 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 Fidelity Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Fidelity Flex.
Diversification Opportunities for Franklin High and Fidelity Flex
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Fidelity is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Fidelity Flex Freedom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Flex Freedom 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 Fidelity Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Flex Freedom has no effect on the direction of Franklin High i.e., Franklin High and Fidelity Flex go up and down completely randomly.
Pair Corralation between Franklin High and Fidelity Flex
Assuming the 90 days horizon Franklin High is expected to generate 7.58 times less return on investment than Fidelity Flex. But when comparing it to its historical volatility, Franklin High Yield is 2.34 times less risky than Fidelity Flex. It trades about 0.01 of its potential returns per unit of risk. Fidelity Flex Freedom is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,317 in Fidelity Flex Freedom on October 25, 2024 and sell it today you would earn a total of 12.00 from holding Fidelity Flex Freedom or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Yield vs. Fidelity Flex Freedom
Performance |
| Timeline |
| Franklin High Yield |
| Fidelity Flex Freedom |
Franklin High and Fidelity Flex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Fidelity Flex
The main advantage of trading using opposite Franklin High and Fidelity Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Fidelity Flex 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 Fidelity Flex will offset losses from the drop in Fidelity Flex's long position.| Franklin High vs. Inflation Protected Bond Fund | Franklin High vs. Lord Abbett Inflation | Franklin High vs. Simt Multi Asset Inflation | Franklin High vs. Tiaa Cref Inflation Link |
| Fidelity Flex vs. Multisector Bond Sma | Fidelity Flex vs. Rbc Ultra Short Fixed | Fidelity Flex vs. Intermediate Term Tax Free Bond | Fidelity Flex vs. Franklin 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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