Correlation Between Franklin Adjustable and Long Term
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Long Term 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 Long Term 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 Long Term Government Fund, you can compare the effects of market volatilities on Franklin Adjustable and Long Term 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 Long Term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Long Term.
Diversification Opportunities for Franklin Adjustable and Long Term
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Long is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Long Term Government Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long Term Government 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 Long Term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long Term Government has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Long Term go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Long Term
Assuming the 90 days horizon Franklin Adjustable Government is expected to generate 0.19 times more return on investment than Long Term. However, Franklin Adjustable Government is 5.26 times less risky than Long Term. It trades about 0.18 of its potential returns per unit of risk. Long Term Government Fund is currently generating about -0.01 per unit of risk. If you would invest 750.00 in Franklin Adjustable Government on October 22, 2024 and sell it today you would earn a total of 3.00 from holding Franklin Adjustable Government or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Long Term Government Fund
Performance |
| Timeline |
| Franklin Adjustable |
| Long Term Government |
Franklin Adjustable and Long Term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Long Term
The main advantage of trading using opposite Franklin Adjustable and Long Term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Long Term 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 Long Term will offset losses from the drop in Long Term's long position.| Franklin Adjustable vs. Black Oak Emerging | Franklin Adjustable vs. Delaware Emerging Markets | Franklin Adjustable vs. Catalystmillburn Hedge Strategy | Franklin Adjustable vs. Saat Defensive Strategy |
| Long Term vs. Intermediate Government Bond | Long Term vs. Schwab Government Money | Long Term vs. Short Term Government Fund | Long Term vs. Payden Government Fund |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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