Correlation Between Franklin High and Wells Fargo
Can any of the company-specific risk be diversified away by investing in both Franklin High and Wells Fargo 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 Wells Fargo 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 Wells Fargo Government, you can compare the effects of market volatilities on Franklin High and Wells Fargo 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 Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Wells Fargo.
Diversification Opportunities for Franklin High and Wells Fargo
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Wells is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Wells Fargo Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo Government 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 Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo Government has no effect on the direction of Franklin High i.e., Franklin High and Wells Fargo go up and down completely randomly.
Pair Corralation between Franklin High and Wells Fargo
Assuming the 90 days horizon Franklin High Yield is expected to generate 0.67 times more return on investment than Wells Fargo. However, Franklin High Yield is 1.5 times less risky than Wells Fargo. It trades about 0.08 of its potential returns per unit of risk. Wells Fargo Government is currently generating about 0.03 per unit of risk. If you would invest 823.00 in Franklin High Yield on September 14, 2024 and sell it today you would earn a total of 103.00 from holding Franklin High Yield or generate 12.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Yield vs. Wells Fargo Government
Performance |
| Timeline |
| Franklin High Yield |
| Wells Fargo Government |
Franklin High and Wells Fargo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Wells Fargo
The main advantage of trading using opposite Franklin High and Wells Fargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Wells Fargo 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 Wells Fargo will offset losses from the drop in Wells Fargo'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 |
| Wells Fargo vs. Small Pany Growth | Wells Fargo vs. Qs Growth Fund | Wells Fargo vs. Vy Baron Growth | Wells Fargo vs. Rational Defensive Growth |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |