Correlation Between Franklin High and Baron Health
Can any of the company-specific risk be diversified away by investing in both Franklin High and Baron Health 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 Baron Health 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 Baron Health Care, you can compare the effects of market volatilities on Franklin High and Baron Health 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 Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Baron Health.
Diversification Opportunities for Franklin High and Baron Health
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Baron is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Baron Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Health Care 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 Baron Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Health Care has no effect on the direction of Franklin High i.e., Franklin High and Baron Health go up and down completely randomly.
Pair Corralation between Franklin High and Baron Health
Assuming the 90 days horizon Franklin High Yield is expected to generate 0.16 times more return on investment than Baron Health. However, Franklin High Yield is 6.39 times less risky than Baron Health. It trades about 0.42 of its potential returns per unit of risk. Baron Health Care is currently generating about -0.23 per unit of risk. If you would invest 905.00 in Franklin High Yield on September 12, 2024 and sell it today you would earn a total of 12.00 from holding Franklin High Yield or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Yield vs. Baron Health Care
Performance |
| Timeline |
| Franklin High Yield |
| Baron Health Care |
Franklin High and Baron Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Baron Health
The main advantage of trading using opposite Franklin High and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Baron Health 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 Baron Health will offset losses from the drop in Baron Health's long position.| Franklin High vs. Cref Money Market | Franklin High vs. Chestnut Street Exchange | Franklin High vs. Aig Government Money | Franklin High vs. Matson Money Equity |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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