Correlation Between Franklin High and Pacific Funds
Can any of the company-specific risk be diversified away by investing in both Franklin High and Pacific Funds 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 Pacific Funds 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 Pacific Funds Portfolio, you can compare the effects of market volatilities on Franklin High and Pacific Funds 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 Pacific Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Pacific Funds.
Diversification Opportunities for Franklin High and Pacific Funds
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Pacific is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Pacific Funds Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Funds Portfolio 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 Pacific Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Funds Portfolio has no effect on the direction of Franklin High i.e., Franklin High and Pacific Funds go up and down completely randomly.
Pair Corralation between Franklin High and Pacific Funds
Assuming the 90 days horizon Franklin High Yield is expected to generate 0.43 times more return on investment than Pacific Funds. However, Franklin High Yield is 2.35 times less risky than Pacific Funds. It trades about 0.39 of its potential returns per unit of risk. Pacific Funds Portfolio is currently generating about 0.15 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 11.00 from holding Franklin High Yield or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin High Yield vs. Pacific Funds Portfolio
Performance |
| Timeline |
| Franklin High Yield |
| Pacific Funds Portfolio |
Franklin High and Pacific Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Pacific Funds
The main advantage of trading using opposite Franklin High and Pacific Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Pacific Funds 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 Pacific Funds will offset losses from the drop in Pacific Funds' 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 |
| Pacific Funds vs. Kinetics Global Fund | Pacific Funds vs. Morningstar Global Income | Pacific Funds vs. Scharf Global Opportunity | Pacific Funds vs. Dreyfusstandish Global Fixed |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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