Correlation Between Franklin High and Pioneer Strategic
Can any of the company-specific risk be diversified away by investing in both Franklin High and Pioneer Strategic 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 Pioneer Strategic 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 Pioneer Strategic Income, you can compare the effects of market volatilities on Franklin High and Pioneer Strategic 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 Pioneer Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Pioneer Strategic.
Diversification Opportunities for Franklin High and Pioneer Strategic
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Pioneer is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Pioneer Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Strategic Income 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 Pioneer Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Strategic Income has no effect on the direction of Franklin High i.e., Franklin High and Pioneer Strategic go up and down completely randomly.
Pair Corralation between Franklin High and Pioneer Strategic
Assuming the 90 days horizon Franklin High is expected to generate 1.23 times less return on investment than Pioneer Strategic. But when comparing it to its historical volatility, Franklin High Yield is 1.75 times less risky than Pioneer Strategic. It trades about 0.39 of its potential returns per unit of risk. Pioneer Strategic Income is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 949.00 in Pioneer Strategic Income on September 13, 2024 and sell it today you would earn a total of 14.00 from holding Pioneer Strategic Income or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Yield vs. Pioneer Strategic Income
Performance |
| Timeline |
| Franklin High Yield |
| Pioneer Strategic Income |
Franklin High and Pioneer Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Pioneer Strategic
The main advantage of trading using opposite Franklin High and Pioneer Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Pioneer Strategic 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 Pioneer Strategic will offset losses from the drop in Pioneer Strategic'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 |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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