Correlation Between Franklin High and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both Franklin High and Credit Suisse 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 Credit Suisse 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 Credit Suisse Floating, you can compare the effects of market volatilities on Franklin High and Credit Suisse 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 Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Credit Suisse.
Diversification Opportunities for Franklin High and Credit Suisse
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Credit is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Credit Suisse Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Floating 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 Credit Suisse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Suisse Floating has no effect on the direction of Franklin High i.e., Franklin High and Credit Suisse go up and down completely randomly.
Pair Corralation between Franklin High and Credit Suisse
Assuming the 90 days horizon Franklin High Yield is expected to generate 1.66 times more return on investment than Credit Suisse. However, Franklin High is 1.66 times more volatile than Credit Suisse Floating. It trades about 0.19 of its potential returns per unit of risk. Credit Suisse Floating is currently generating about 0.1 per unit of risk. If you would invest 904.00 in Franklin High Yield on September 1, 2024 and sell it today you would earn a total of 13.00 from holding Franklin High Yield or generate 1.44% 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. Credit Suisse Floating
Performance |
| Timeline |
| Franklin High Yield |
| Credit Suisse Floating |
Franklin High and Credit Suisse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Credit Suisse
The main advantage of trading using opposite Franklin High and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Credit Suisse 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 Credit Suisse will offset losses from the drop in Credit Suisse'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 |
| Credit Suisse vs. Shelton Emerging Markets | Credit Suisse vs. Sp Midcap Index | Credit Suisse vs. Siit Emerging Markets | Credit Suisse vs. Doubleline Emerging Markets |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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