Correlation Between Franklin High and Columbia Thermostat
Can any of the company-specific risk be diversified away by investing in both Franklin High and Columbia Thermostat 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 Columbia Thermostat 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 Columbia Thermostat Fund, you can compare the effects of market volatilities on Franklin High and Columbia Thermostat 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 Columbia Thermostat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Columbia Thermostat.
Diversification Opportunities for Franklin High and Columbia Thermostat
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Columbia is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Columbia Thermostat Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Thermostat 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 Columbia Thermostat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Thermostat has no effect on the direction of Franklin High i.e., Franklin High and Columbia Thermostat go up and down completely randomly.
Pair Corralation between Franklin High and Columbia Thermostat
Assuming the 90 days horizon Franklin High is expected to generate 1.33 times less return on investment than Columbia Thermostat. But when comparing it to its historical volatility, Franklin High Yield is 1.38 times less risky than Columbia Thermostat. It trades about 0.09 of its potential returns per unit of risk. Columbia Thermostat Fund is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,429 in Columbia Thermostat Fund on September 12, 2024 and sell it today you would earn a total of 283.00 from holding Columbia Thermostat Fund or generate 19.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Yield vs. Columbia Thermostat Fund
Performance |
| Timeline |
| Franklin High Yield |
| Columbia Thermostat |
Franklin High and Columbia Thermostat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Columbia Thermostat
The main advantage of trading using opposite Franklin High and Columbia Thermostat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Columbia Thermostat 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 Columbia Thermostat will offset losses from the drop in Columbia Thermostat'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 |
| Columbia Thermostat vs. California High Yield Municipal | Columbia Thermostat vs. Franklin High Yield | Columbia Thermostat vs. T Rowe Price | Columbia Thermostat vs. Counterpoint Tactical Municipal |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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