Correlation Between Franklin High and Tcw High
Can any of the company-specific risk be diversified away by investing in both Franklin High and Tcw High 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 Tcw High 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 Tcw High Yield, you can compare the effects of market volatilities on Franklin High and Tcw High 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 Tcw High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Tcw High.
Diversification Opportunities for Franklin High and Tcw High
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Tcw is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Tcw High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tcw High Yield 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 Tcw High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tcw High Yield has no effect on the direction of Franklin High i.e., Franklin High and Tcw High go up and down completely randomly.
Pair Corralation between Franklin High and Tcw High
Assuming the 90 days horizon Franklin High Yield is expected to generate 7.65 times more return on investment than Tcw High. However, Franklin High is 7.65 times more volatile than Tcw High Yield. It trades about 0.06 of its potential returns per unit of risk. Tcw High Yield is currently generating about 0.09 per unit of risk. If you would invest 923.00 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Yield vs. Tcw High Yield
Performance |
| Timeline |
| Franklin High Yield |
| Tcw High Yield |
Franklin High and Tcw High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Tcw High
The main advantage of trading using opposite Franklin High and Tcw High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Tcw High 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 Tcw High will offset losses from the drop in Tcw High'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 |
| Tcw High vs. Tcw Enhanced Modity | Tcw High vs. Tcw Relative Value | Tcw High vs. Tcw Relative Value | Tcw High vs. Tcw Relative Value |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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