Correlation Between Franklin High and Conestoga Small
Can any of the company-specific risk be diversified away by investing in both Franklin High and Conestoga Small 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 Conestoga Small 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 Conestoga Small Cap, you can compare the effects of market volatilities on Franklin High and Conestoga Small 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 Conestoga Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Conestoga Small.
Diversification Opportunities for Franklin High and Conestoga Small
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Conestoga is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Conestoga Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conestoga Small Cap 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 Conestoga Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conestoga Small Cap has no effect on the direction of Franklin High i.e., Franklin High and Conestoga Small go up and down completely randomly.
Pair Corralation between Franklin High and Conestoga Small
Assuming the 90 days horizon Franklin High Yield is expected to generate 0.28 times more return on investment than Conestoga Small. However, Franklin High Yield is 3.54 times less risky than Conestoga Small. It trades about -0.38 of its potential returns per unit of risk. Conestoga Small Cap is currently generating about -0.29 per unit of risk. If you would invest 919.00 in Franklin High Yield on October 7, 2024 and sell it today you would lose (20.00) from holding Franklin High Yield or give up 2.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Yield vs. Conestoga Small Cap
Performance |
| Timeline |
| Franklin High Yield |
| Conestoga Small Cap |
Franklin High and Conestoga Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Conestoga Small
The main advantage of trading using opposite Franklin High and Conestoga Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Conestoga Small 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 Conestoga Small will offset losses from the drop in Conestoga Small's long position.| Franklin High vs. Transamerica Capital Growth | Franklin High vs. Ftfa Franklin Templeton Growth | Franklin High vs. Needham Aggressive Growth | Franklin High vs. Eip Growth And |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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