Correlation Between Franklin High and Saat Market

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Franklin High and Saat Market 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 Saat Market 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 Saat Market Growth, you can compare the effects of market volatilities on Franklin High and Saat Market 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 Saat Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Saat Market.

Diversification Opportunities for Franklin High and Saat Market

0.38
  Correlation Coefficient

Weak diversification

The 3 months correlation between Franklin and Saat is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Saat Market Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Market Growth 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 Saat Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Market Growth has no effect on the direction of Franklin High i.e., Franklin High and Saat Market go up and down completely randomly.

Pair Corralation between Franklin High and Saat Market

Assuming the 90 days horizon Franklin High Yield is expected to generate 0.59 times more return on investment than Saat Market. However, Franklin High Yield is 1.69 times less risky than Saat Market. It trades about 0.07 of its potential returns per unit of risk. Saat Market Growth is currently generating about 0.04 per unit of risk. If you would invest  908.00  in Franklin High Yield on September 12, 2024 and sell it today you would earn a total of  9.00  from holding Franklin High Yield or generate 0.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Franklin High Yield  vs.  Saat Market Growth

 Performance 
       Timeline  
Franklin High Yield 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Franklin High Yield are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Franklin High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Saat Market Growth 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Saat Market Growth are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Saat Market is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Franklin High and Saat Market Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Franklin High and Saat Market

The main advantage of trading using opposite Franklin High and Saat Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Saat Market 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 Saat Market will offset losses from the drop in Saat Market's long position.
The idea behind Franklin High Yield and Saat Market Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing