Correlation Between Franklin High and Global Fixed
Can any of the company-specific risk be diversified away by investing in both Franklin High and Global Fixed 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 Global Fixed 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 Global Fixed Income, you can compare the effects of market volatilities on Franklin High and Global Fixed 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 Global Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Global Fixed.
Diversification Opportunities for Franklin High and Global Fixed
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Global is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Global Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Fixed Income 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 Global Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Fixed Income has no effect on the direction of Franklin High i.e., Franklin High and Global Fixed go up and down completely randomly.
Pair Corralation between Franklin High and Global Fixed
Assuming the 90 days horizon Franklin High Yield is expected to generate 1.51 times more return on investment than Global Fixed. However, Franklin High is 1.51 times more volatile than Global Fixed Income. It trades about 0.15 of its potential returns per unit of risk. Global Fixed Income is currently generating about 0.19 per unit of risk. If you would invest 858.00 in Franklin High Yield on September 4, 2024 and sell it today you would earn a total of 59.00 from holding Franklin High Yield or generate 6.88% 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. Global Fixed Income
Performance |
| Timeline |
| Franklin High Yield |
| Global Fixed Income |
Franklin High and Global Fixed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Global Fixed
The main advantage of trading using opposite Franklin High and Global Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Global Fixed 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 Global Fixed will offset losses from the drop in Global Fixed'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 |
| Global Fixed vs. John Hancock Funds | Global Fixed vs. Franklin Lifesmart 2050 | Global Fixed vs. T Rowe Price | Global Fixed vs. T Rowe Price |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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