Correlation Between Franklin High and Artisan Select
Can any of the company-specific risk be diversified away by investing in both Franklin High and Artisan Select 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 Artisan Select 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 Artisan Select Equity, you can compare the effects of market volatilities on Franklin High and Artisan Select 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 Artisan Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Artisan Select.
Diversification Opportunities for Franklin High and Artisan Select
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Artisan is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Artisan Select Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Select Equity 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 Artisan Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Select Equity has no effect on the direction of Franklin High i.e., Franklin High and Artisan Select go up and down completely randomly.
Pair Corralation between Franklin High and Artisan Select
Assuming the 90 days horizon Franklin High is expected to generate 2.5 times less return on investment than Artisan Select. But when comparing it to its historical volatility, Franklin High Yield is 2.3 times less risky than Artisan Select. It trades about 0.1 of its potential returns per unit of risk. Artisan Select Equity is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,232 in Artisan Select Equity on September 2, 2024 and sell it today you would earn a total of 400.00 from holding Artisan Select Equity or generate 32.47% 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. Artisan Select Equity
Performance |
| Timeline |
| Franklin High Yield |
| Artisan Select Equity |
Franklin High and Artisan Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Artisan Select
The main advantage of trading using opposite Franklin High and Artisan Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Artisan Select 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 Artisan Select will offset losses from the drop in Artisan Select'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 |
| Artisan Select vs. Artisan Select Equity | Artisan Select vs. Artisan Developing World | Artisan Select vs. Artisan Focus | Artisan Select vs. Artisan Small Cap |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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