Correlation Between Franklin High and Blackrock Fundamental
Can any of the company-specific risk be diversified away by investing in both Franklin High and Blackrock Fundamental 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 Blackrock Fundamental 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 Blackrock Fundamental Growth, you can compare the effects of market volatilities on Franklin High and Blackrock Fundamental 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 Blackrock Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Blackrock Fundamental.
Diversification Opportunities for Franklin High and Blackrock Fundamental
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Franklin and Blackrock is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Blackrock Fundamental Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Fundamental 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 Blackrock Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Fundamental has no effect on the direction of Franklin High i.e., Franklin High and Blackrock Fundamental go up and down completely randomly.
Pair Corralation between Franklin High and Blackrock Fundamental
Assuming the 90 days horizon Franklin High is expected to generate 4.49 times less return on investment than Blackrock Fundamental. But when comparing it to its historical volatility, Franklin High Yield is 4.13 times less risky than Blackrock Fundamental. It trades about 0.09 of its potential returns per unit of risk. Blackrock Fundamental Growth is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,529 in Blackrock Fundamental Growth on September 12, 2024 and sell it today you would earn a total of 2,022 from holding Blackrock Fundamental Growth or generate 79.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Franklin High Yield vs. Blackrock Fundamental Growth
Performance |
| Timeline |
| Franklin High Yield |
| Blackrock Fundamental |
Franklin High and Blackrock Fundamental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Blackrock Fundamental
The main advantage of trading using opposite Franklin High and Blackrock Fundamental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Blackrock Fundamental 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 Blackrock Fundamental will offset losses from the drop in Blackrock Fundamental'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 |
| Blackrock Fundamental vs. Putnam Money Market | Blackrock Fundamental vs. Matson Money Equity | Blackrock Fundamental vs. Hsbc Treasury Money | Blackrock Fundamental vs. Dws Government Money |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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