Correlation Between Franklin High and Mainstay Cbre
Can any of the company-specific risk be diversified away by investing in both Franklin High and Mainstay Cbre 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 Mainstay Cbre 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 Mainstay Cbre Global, you can compare the effects of market volatilities on Franklin High and Mainstay Cbre 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 Mainstay Cbre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Mainstay Cbre.
Diversification Opportunities for Franklin High and Mainstay Cbre
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Mainstay is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Mainstay Cbre Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Cbre Global 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 Mainstay Cbre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Cbre Global has no effect on the direction of Franklin High i.e., Franklin High and Mainstay Cbre go up and down completely randomly.
Pair Corralation between Franklin High and Mainstay Cbre
Assuming the 90 days horizon Franklin High is expected to generate 1.15 times less return on investment than Mainstay Cbre. But when comparing it to its historical volatility, Franklin High Yield is 2.58 times less risky than Mainstay Cbre. It trades about 0.08 of its potential returns per unit of risk. Mainstay Cbre Global is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,219 in Mainstay Cbre Global on September 4, 2024 and sell it today you would earn a total of 163.00 from holding Mainstay Cbre Global or generate 13.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Franklin High Yield vs. Mainstay Cbre Global
Performance |
| Timeline |
| Franklin High Yield |
| Mainstay Cbre Global |
Franklin High and Mainstay Cbre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Mainstay Cbre
The main advantage of trading using opposite Franklin High and Mainstay Cbre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Mainstay Cbre 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 Mainstay Cbre will offset losses from the drop in Mainstay Cbre'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 |
| Mainstay Cbre vs. Mainstay Tax Free | Mainstay Cbre vs. Mainstay Large Cap | Mainstay Cbre vs. Mainstay Large Cap | Mainstay Cbre vs. Mainstay Large Cap |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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