Correlation Between Franklin High and 1290 Retirement
Can any of the company-specific risk be diversified away by investing in both Franklin High and 1290 Retirement 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 1290 Retirement 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 1290 Retirement 2045, you can compare the effects of market volatilities on Franklin High and 1290 Retirement 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 1290 Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and 1290 Retirement.
Diversification Opportunities for Franklin High and 1290 Retirement
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and 1290 is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and 1290 Retirement 2045 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1290 Retirement 2045 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 1290 Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1290 Retirement 2045 has no effect on the direction of Franklin High i.e., Franklin High and 1290 Retirement go up and down completely randomly.
Pair Corralation between Franklin High and 1290 Retirement
Assuming the 90 days horizon Franklin High Yield is expected to generate 0.54 times more return on investment than 1290 Retirement. However, Franklin High Yield is 1.85 times less risky than 1290 Retirement. It trades about 0.38 of its potential returns per unit of risk. 1290 Retirement 2045 is currently generating about 0.13 per unit of risk. If you would invest 905.00 in Franklin High Yield on September 13, 2024 and sell it today you would earn a total of 11.00 from holding Franklin High Yield or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin High Yield vs. 1290 Retirement 2045
Performance |
| Timeline |
| Franklin High Yield |
| 1290 Retirement 2045 |
Franklin High and 1290 Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and 1290 Retirement
The main advantage of trading using opposite Franklin High and 1290 Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, 1290 Retirement 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 1290 Retirement will offset losses from the drop in 1290 Retirement's long position.| Franklin High vs. Lebenthal Lisanti Small | Franklin High vs. Guidemark Smallmid Cap | Franklin High vs. Vy Columbia Small | Franklin High vs. Ab Small Cap |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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