Correlation Between Franklin High and Nicholas
Can any of the company-specific risk be diversified away by investing in both Franklin High and Nicholas 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 Nicholas 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 Nicholas Ltd Edition, you can compare the effects of market volatilities on Franklin High and Nicholas 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 Nicholas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Nicholas.
Diversification Opportunities for Franklin High and Nicholas
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Nicholas is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Nicholas Ltd Edition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicholas Edition 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 Nicholas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nicholas Edition has no effect on the direction of Franklin High i.e., Franklin High and Nicholas go up and down completely randomly.
Pair Corralation between Franklin High and Nicholas
Assuming the 90 days horizon Franklin High Yield is expected to generate 0.24 times more return on investment than Nicholas. However, Franklin High Yield is 4.12 times less risky than Nicholas. It trades about -0.38 of its potential returns per unit of risk. Nicholas Ltd Edition is currently generating about -0.28 per unit of risk. If you would invest 919.00 in Franklin High Yield on October 7, 2024 and sell it today you would lose (20.00) from holding Franklin High Yield or give up 2.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Yield vs. Nicholas Ltd Edition
Performance |
| Timeline |
| Franklin High Yield |
| Nicholas Edition |
Franklin High and Nicholas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Nicholas
The main advantage of trading using opposite Franklin High and Nicholas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Nicholas 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 Nicholas will offset losses from the drop in Nicholas' long position.| Franklin High vs. Transamerica Capital Growth | Franklin High vs. Ftfa Franklin Templeton Growth | Franklin High vs. Needham Aggressive Growth | Franklin High vs. Eip Growth And |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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