Correlation Between Franklin High and Swan Defined
Can any of the company-specific risk be diversified away by investing in both Franklin High and Swan Defined 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 Swan Defined 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 Swan Defined Risk, you can compare the effects of market volatilities on Franklin High and Swan Defined 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 Swan Defined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Swan Defined.
Diversification Opportunities for Franklin High and Swan Defined
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Swan is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Swan Defined Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swan Defined Risk 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 Swan Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swan Defined Risk has no effect on the direction of Franklin High i.e., Franklin High and Swan Defined go up and down completely randomly.
Pair Corralation between Franklin High and Swan Defined
Assuming the 90 days horizon Franklin High Yield is expected to generate 0.24 times more return on investment than Swan Defined. However, Franklin High Yield is 4.08 times less risky than Swan Defined. It trades about 0.08 of its potential returns per unit of risk. Swan Defined Risk is currently generating about 0.01 per unit of risk. If you would invest 808.00 in Franklin High Yield on August 27, 2024 and sell it today you would earn a total of 101.00 from holding Franklin High Yield or generate 12.5% 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. Swan Defined Risk
Performance |
| Timeline |
| Franklin High Yield |
| Swan Defined Risk |
Franklin High and Swan Defined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Swan Defined
The main advantage of trading using opposite Franklin High and Swan Defined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Swan Defined 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 Swan Defined will offset losses from the drop in Swan Defined's long position.| Franklin High vs. Franklin Mutual Beacon | Franklin High vs. Templeton Developing Markets | Franklin High vs. Franklin Mutual Global | Franklin High vs. Franklin Mutual Global |
| Swan Defined vs. Metropolitan West Porate | Swan Defined vs. Dws Government Money | Swan Defined vs. T Rowe Price | Swan Defined vs. Franklin High Yield |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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