Correlation Between Franklin High and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Franklin High and Massmutual Select 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 Massmutual Select 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 Massmutual Select Mid Cap, you can compare the effects of market volatilities on Franklin High and Massmutual Select 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 Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Massmutual Select.
Diversification Opportunities for Franklin High and Massmutual Select
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Massmutual is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Massmutual Select Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Mid 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 Massmutual Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Select Mid has no effect on the direction of Franklin High i.e., Franklin High and Massmutual Select go up and down completely randomly.
Pair Corralation between Franklin High and Massmutual Select
Assuming the 90 days horizon Franklin High Yield is expected to generate 0.22 times more return on investment than Massmutual Select. However, Franklin High Yield is 4.48 times less risky than Massmutual Select. It trades about 0.03 of its potential returns per unit of risk. Massmutual Select Mid Cap is currently generating about -0.07 per unit of risk. If you would invest 892.00 in Franklin High Yield on October 21, 2024 and sell it today you would earn a total of 1.00 from holding Franklin High Yield or generate 0.11% 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. Massmutual Select Mid Cap
Performance |
| Timeline |
| Franklin High Yield |
| Massmutual Select Mid |
Franklin High and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Massmutual Select
The main advantage of trading using opposite Franklin High and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Massmutual Select 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 Massmutual Select will offset losses from the drop in Massmutual Select's long position.| Franklin High vs. 1919 Financial Services | Franklin High vs. Fidelity Advisor Financial | Franklin High vs. Vanguard Financials Index | Franklin High vs. Rmb Mendon Financial |
| Massmutual Select vs. Buffalo High Yield | Massmutual Select vs. City National Rochdale | Massmutual Select vs. Prudential High Yield | Massmutual Select vs. Fidelity Capital Income |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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