Correlation Between Franklin High and Praxis Value
Can any of the company-specific risk be diversified away by investing in both Franklin High and Praxis Value 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 Praxis Value 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 Praxis Value Index, you can compare the effects of market volatilities on Franklin High and Praxis Value 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 Praxis Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Praxis Value.
Diversification Opportunities for Franklin High and Praxis Value
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Praxis is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Praxis Value Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praxis Value Index 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 Praxis Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praxis Value Index has no effect on the direction of Franklin High i.e., Franklin High and Praxis Value go up and down completely randomly.
Pair Corralation between Franklin High and Praxis Value
Assuming the 90 days horizon Franklin High Yield is expected to generate 0.31 times more return on investment than Praxis Value. However, Franklin High Yield is 3.23 times less risky than Praxis Value. It trades about 0.42 of its potential returns per unit of risk. Praxis Value Index is currently generating about -0.1 per unit of risk. If you would invest 905.00 in Franklin High Yield on September 12, 2024 and sell it today you would earn a total of 12.00 from holding Franklin High Yield or generate 1.33% 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. Praxis Value Index
Performance |
| Timeline |
| Franklin High Yield |
| Praxis Value Index |
Franklin High and Praxis Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Praxis Value
The main advantage of trading using opposite Franklin High and Praxis Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Praxis Value 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 Praxis Value will offset losses from the drop in Praxis Value'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 |
| Praxis Value vs. Franklin High Yield | Praxis Value vs. Counterpoint Tactical Municipal | Praxis Value vs. Ishares Municipal Bond | Praxis Value vs. Bbh Intermediate Municipal |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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