Correlation Between Franklin High and Calamos Evolving
Can any of the company-specific risk be diversified away by investing in both Franklin High and Calamos Evolving 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 Calamos Evolving 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 Calamos Evolving World, you can compare the effects of market volatilities on Franklin High and Calamos Evolving 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 Calamos Evolving. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Calamos Evolving.
Diversification Opportunities for Franklin High and Calamos Evolving
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Calamos is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Calamos Evolving World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Evolving World 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 Calamos Evolving. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Evolving World has no effect on the direction of Franklin High i.e., Franklin High and Calamos Evolving go up and down completely randomly.
Pair Corralation between Franklin High and Calamos Evolving
Assuming the 90 days horizon Franklin High Yield is expected to generate 0.25 times more return on investment than Calamos Evolving. However, Franklin High Yield is 4.06 times less risky than Calamos Evolving. It trades about 0.38 of its potential returns per unit of risk. Calamos Evolving World is currently generating about -0.03 per unit of risk. If you would invest 905.00 in Franklin High Yield on September 13, 2024 and sell it today you would earn a total of 11.00 from holding Franklin High Yield or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin High Yield vs. Calamos Evolving World
Performance |
| Timeline |
| Franklin High Yield |
| Calamos Evolving World |
Franklin High and Calamos Evolving Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Calamos Evolving
The main advantage of trading using opposite Franklin High and Calamos Evolving positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Calamos Evolving 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 Calamos Evolving will offset losses from the drop in Calamos Evolving's long position.| Franklin High vs. Lebenthal Lisanti Small | Franklin High vs. Guidemark Smallmid Cap | Franklin High vs. Vy Columbia Small | Franklin High vs. Ab 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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