Correlation Between Franklin High and Franklin New
Can any of the company-specific risk be diversified away by investing in both Franklin High and Franklin New 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 Franklin New 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 Franklin New York, you can compare the effects of market volatilities on Franklin High and Franklin New 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 Franklin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Franklin New.
Diversification Opportunities for Franklin High and Franklin New
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Franklin and Franklin is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Franklin New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New York 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 Franklin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New York has no effect on the direction of Franklin High i.e., Franklin High and Franklin New go up and down completely randomly.
Pair Corralation between Franklin High and Franklin New
Assuming the 90 days horizon Franklin High Yield is expected to under-perform the Franklin New. In addition to that, Franklin High is 1.67 times more volatile than Franklin New York. It trades about -0.15 of its total potential returns per unit of risk. Franklin New York is currently generating about -0.12 per unit of volatility. If you would invest 1,071 in Franklin New York on January 16, 2025 and sell it today you would lose (18.00) from holding Franklin New York or give up 1.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Yield vs. Franklin New York
Performance |
| Timeline |
| Franklin High Yield |
| Franklin New York |
Franklin High and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Franklin New
The main advantage of trading using opposite Franklin High and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Franklin New 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 Franklin New will offset losses from the drop in Franklin New's long position.| Franklin High vs. Doubleline Global Bond | Franklin High vs. Dreyfusstandish Global Fixed | Franklin High vs. Rbb Fund | Franklin High vs. Morningstar Global Income |
| Franklin New vs. Fidelity Government Money | Franklin New vs. Hsbc Treasury Money | Franklin New vs. Rbc Money Market | Franklin New vs. Ab Government Exchange |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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