Correlation Between Franklin High and Viking Tax
Can any of the company-specific risk be diversified away by investing in both Franklin High and Viking Tax 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 Viking Tax 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 Viking Tax Free Fund, you can compare the effects of market volatilities on Franklin High and Viking Tax 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 Viking Tax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Viking Tax.
Diversification Opportunities for Franklin High and Viking Tax
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Viking is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Viking Tax Free Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking Tax Free 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 Viking Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Tax Free has no effect on the direction of Franklin High i.e., Franklin High and Viking Tax go up and down completely randomly.
Pair Corralation between Franklin High and Viking Tax
Assuming the 90 days horizon Franklin High Yield is expected to generate 1.46 times more return on investment than Viking Tax. However, Franklin High is 1.46 times more volatile than Viking Tax Free Fund. It trades about 0.14 of its potential returns per unit of risk. Viking Tax Free Fund is currently generating about 0.03 per unit of risk. If you would invest 841.00 in Franklin High Yield on September 12, 2024 and sell it today you would earn a total of 75.00 from holding Franklin High Yield or generate 8.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin High Yield vs. Viking Tax Free Fund
Performance |
| Timeline |
| Franklin High Yield |
| Viking Tax Free |
Franklin High and Viking Tax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin High and Viking Tax
The main advantage of trading using opposite Franklin High and Viking Tax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Viking Tax 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 Viking Tax will offset losses from the drop in Viking Tax'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 |
| Viking Tax vs. T Rowe Price | Viking Tax vs. Baird Strategic Municipal | Viking Tax vs. Counterpoint Tactical Municipal | Viking Tax 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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