Correlation Between Franklin Adjustable and Guggenheim Market
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Guggenheim 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 Adjustable and Guggenheim Market 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 Guggenheim Market Neutral, you can compare the effects of market volatilities on Franklin Adjustable and Guggenheim 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 Adjustable with a short position of Guggenheim Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Guggenheim Market.
Diversification Opportunities for Franklin Adjustable and Guggenheim Market
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Guggenheim is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Guggenheim Market Neutral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Market Neutral 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 Guggenheim Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Market Neutral has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Guggenheim Market go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Guggenheim Market
Assuming the 90 days horizon Franklin Adjustable Government is expected to under-perform the Guggenheim Market. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Adjustable Government is 1.41 times less risky than Guggenheim Market. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Guggenheim Market Neutral is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,695 in Guggenheim Market Neutral on September 4, 2024 and sell it today you would earn a total of 7.00 from holding Guggenheim Market Neutral or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Guggenheim Market Neutral
Performance |
| Timeline |
| Franklin Adjustable |
| Guggenheim Market Neutral |
Franklin Adjustable and Guggenheim Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Guggenheim Market
The main advantage of trading using opposite Franklin Adjustable and Guggenheim Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Guggenheim 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 Guggenheim Market will offset losses from the drop in Guggenheim Market'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 Stocks Directory module to find actively traded stocks across global markets.
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