Correlation Between Franklin Adjustable and Real Return
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Real Return 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 Real Return 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 Real Return Fund, you can compare the effects of market volatilities on Franklin Adjustable and Real Return 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 Real Return. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Real Return.
Diversification Opportunities for Franklin Adjustable and Real Return
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FRANKLIN and Real is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Real Return Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Return Fund 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 Real Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Return Fund has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Real Return go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Real Return
Assuming the 90 days horizon Franklin Adjustable Government is expected to under-perform the Real Return. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Adjustable Government is 3.97 times less risky than Real Return. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Real Return Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,010 in Real Return Fund on September 1, 2024 and sell it today you would earn a total of 5.00 from holding Real Return Fund or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Real Return Fund
Performance |
| Timeline |
| Franklin Adjustable |
| Real Return Fund |
Franklin Adjustable and Real Return Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Real Return
The main advantage of trading using opposite Franklin Adjustable and Real Return positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Real Return 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 Real Return will offset losses from the drop in Real Return's long position.| Franklin Adjustable vs. Virtus Seix Government | Franklin Adjustable vs. Dws Government Money | Franklin Adjustable vs. Dunham Porategovernment Bond | Franklin Adjustable vs. Ab Government Exchange |
| Real Return vs. Blackrock Government Bond | Real Return vs. Us Government Securities | Real Return vs. Franklin Adjustable Government | Real Return vs. Aig Government Money |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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