Correlation Between Franklin Adjustable and Power Dividend
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Power Dividend 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 Power Dividend 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 Power Dividend Index, you can compare the effects of market volatilities on Franklin Adjustable and Power Dividend 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 Power Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Power Dividend.
Diversification Opportunities for Franklin Adjustable and Power Dividend
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Power is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Power Dividend Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Dividend Index 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 Power Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Dividend Index has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Power Dividend go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Power Dividend
Assuming the 90 days horizon Franklin Adjustable Government is expected to under-perform the Power Dividend. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Adjustable Government is 11.27 times less risky than Power Dividend. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Power Dividend Index is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 934.00 in Power Dividend Index on September 5, 2024 and sell it today you would earn a total of 40.00 from holding Power Dividend Index or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Power Dividend Index
Performance |
| Timeline |
| Franklin Adjustable |
| Power Dividend Index |
Franklin Adjustable and Power Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Power Dividend
The main advantage of trading using opposite Franklin Adjustable and Power Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Power Dividend 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 Power Dividend will offset losses from the drop in Power Dividend's long position.| Franklin Adjustable vs. Franklin Mutual Beacon | Franklin Adjustable vs. Templeton Developing Markets | Franklin Adjustable vs. Franklin Mutual Global | Franklin Adjustable vs. Franklin Mutual Global |
| Power Dividend vs. Touchstone Small Cap | Power Dividend vs. Kinetics Small Cap | Power Dividend vs. Small Cap Value | Power Dividend vs. Baird Smallmid Cap |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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