Correlation Between Franklin High and Grandeur Peak
Can any of the company-specific risk be diversified away by investing in both Franklin High and Grandeur Peak 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 Grandeur Peak 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 Grandeur Peak Global, you can compare the effects of market volatilities on Franklin High and Grandeur Peak 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 Grandeur Peak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Grandeur Peak.
Diversification Opportunities for Franklin High and Grandeur Peak
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Grandeur is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Grandeur Peak Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grandeur Peak Global 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 Grandeur Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grandeur Peak Global has no effect on the direction of Franklin High i.e., Franklin High and Grandeur Peak go up and down completely randomly.
Pair Corralation between Franklin High and Grandeur Peak
Assuming the 90 days horizon Franklin High is expected to generate 1.26 times less return on investment than Grandeur Peak. But when comparing it to its historical volatility, Franklin High Yield is 2.92 times less risky than Grandeur Peak. It trades about 0.15 of its potential returns per unit of risk. Grandeur Peak Global is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,287 in Grandeur Peak Global on August 26, 2024 and sell it today you would earn a total of 164.00 from holding Grandeur Peak Global or generate 12.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Yield vs. Grandeur Peak Global
Performance |
| Timeline |
| Franklin High Yield |
| Grandeur Peak Global |
Franklin High and Grandeur Peak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Grandeur Peak
The main advantage of trading using opposite Franklin High and Grandeur Peak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Grandeur Peak 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 Grandeur Peak will offset losses from the drop in Grandeur Peak's long position.| Franklin High vs. Nuveen Minnesota Municipal | Franklin High vs. Morningstar Defensive Bond | Franklin High vs. Intermediate Term Bond Fund | Franklin High vs. Ishares Municipal Bond |
| Grandeur Peak vs. Franklin High Yield | Grandeur Peak vs. Versatile Bond Portfolio | Grandeur Peak vs. Pace Municipal Fixed | Grandeur Peak vs. Maryland Tax Free Bond |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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