Correlation Between Franklin High and Columbia Dividend
Can any of the company-specific risk be diversified away by investing in both Franklin High and Columbia Dividend 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 Columbia Dividend 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 Columbia Dividend Opportunity, you can compare the effects of market volatilities on Franklin High and Columbia Dividend 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 Columbia Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Columbia Dividend.
Diversification Opportunities for Franklin High and Columbia Dividend
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and Columbia is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Columbia Dividend Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Dividend 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 Columbia Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Dividend has no effect on the direction of Franklin High i.e., Franklin High and Columbia Dividend go up and down completely randomly.
Pair Corralation between Franklin High and Columbia Dividend
Assuming the 90 days horizon Franklin High is expected to generate 2.01 times less return on investment than Columbia Dividend. But when comparing it to its historical volatility, Franklin High Yield is 1.69 times less risky than Columbia Dividend. It trades about 0.24 of its potential returns per unit of risk. Columbia Dividend Opportunity is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 4,065 in Columbia Dividend Opportunity on August 30, 2024 and sell it today you would earn a total of 165.00 from holding Columbia Dividend Opportunity or generate 4.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Yield vs. Columbia Dividend Opportunity
Performance |
| Timeline |
| Franklin High Yield |
| Columbia Dividend |
Franklin High and Columbia Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Columbia Dividend
The main advantage of trading using opposite Franklin High and Columbia Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Columbia Dividend 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 Columbia Dividend will offset losses from the drop in Columbia Dividend's long position.| Franklin High vs. Nuveen Massachusetts Municipal | Franklin High vs. Mirova Global Green | Franklin High vs. Sterling Capital Short | Franklin High vs. Maryland Tax Free Bond |
| Columbia Dividend vs. Franklin High Yield | Columbia Dividend vs. Baird Strategic Municipal | Columbia Dividend vs. Intermediate Term Tax Free Bond | Columbia Dividend vs. Nebraska Municipal Fund |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |