Correlation Between Franklin Adjustable and Prudential Short
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Prudential Short 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 Prudential Short 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 Prudential Short Duration, you can compare the effects of market volatilities on Franklin Adjustable and Prudential Short 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 Prudential Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Prudential Short.
Diversification Opportunities for Franklin Adjustable and Prudential Short
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Prudential is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Prudential Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Short Duration 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 Prudential Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Short Duration has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Prudential Short go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Prudential Short
Assuming the 90 days horizon Franklin Adjustable is expected to generate 1.26 times less return on investment than Prudential Short. But when comparing it to its historical volatility, Franklin Adjustable Government is 1.7 times less risky than Prudential Short. It trades about 0.21 of its potential returns per unit of risk. Prudential Short Duration is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 830.00 in Prudential Short Duration on November 27, 2024 and sell it today you would earn a total of 14.00 from holding Prudential Short Duration or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Prudential Short Duration
Performance |
| Timeline |
| Franklin Adjustable |
| Prudential Short Duration |
Franklin Adjustable and Prudential Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Prudential Short
The main advantage of trading using opposite Franklin Adjustable and Prudential Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Prudential Short 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 Prudential Short will offset losses from the drop in Prudential Short's long position.| Franklin Adjustable vs. Goldman Sachs Bond | Franklin Adjustable vs. Bbh Intermediate Municipal | Franklin Adjustable vs. Ab Bond Inflation | Franklin Adjustable vs. Ambrus Core Bond |
| Prudential Short vs. Stone Ridge Diversified | Prudential Short vs. Lord Abbett Diversified | Prudential Short vs. Blackrock Diversified Fixed | Prudential Short vs. Fidelity Advisor Diversified |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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