Correlation Between Franklin Adjustable and Fidelity China
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Fidelity China 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 Adjustable and Fidelity China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Adjustable Government and Fidelity China Region, you can compare the effects of market volatilities on Franklin Adjustable and Fidelity China 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 Adjustable with a short position of Fidelity China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Fidelity China.
Diversification Opportunities for Franklin Adjustable and Fidelity China
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Franklin and Fidelity is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Fidelity China Region in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity China Region and Franklin Adjustable 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 Adjustable Government are associated (or correlated) with Fidelity China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity China Region has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Fidelity China go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Fidelity China
Assuming the 90 days horizon Franklin Adjustable is expected to generate 3.87 times less return on investment than Fidelity China. But when comparing it to its historical volatility, Franklin Adjustable Government is 11.07 times less risky than Fidelity China. It trades about 0.19 of its potential returns per unit of risk. Fidelity China Region is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,111 in Fidelity China Region on September 4, 2024 and sell it today you would earn a total of 791.00 from holding Fidelity China Region or generate 25.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.66% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Fidelity China Region
Performance |
| Timeline |
| Franklin Adjustable |
| Fidelity China Region |
Franklin Adjustable and Fidelity China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Fidelity China
The main advantage of trading using opposite Franklin Adjustable and Fidelity China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Fidelity China 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 Fidelity China will offset losses from the drop in Fidelity China's long position.| Franklin Adjustable vs. Victory Rs Partners | Franklin Adjustable vs. Queens Road Small | Franklin Adjustable vs. Ab Discovery Value | Franklin Adjustable vs. Amg River Road |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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