Correlation Between Franklin Adjustable and Capital World
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Capital World 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 Capital World 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 Capital World Growth, you can compare the effects of market volatilities on Franklin Adjustable and Capital World 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 Capital World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Capital World.
Diversification Opportunities for Franklin Adjustable and Capital World
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between FRANKLIN and Capital is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Capital World Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital World Growth 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 Capital World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital World Growth has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Capital World go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Capital World
Assuming the 90 days horizon Franklin Adjustable Government is expected to under-perform the Capital World. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Adjustable Government is 7.74 times less risky than Capital World. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Capital World Growth is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 6,742 in Capital World Growth on September 1, 2024 and sell it today you would earn a total of 156.00 from holding Capital World Growth or generate 2.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Capital World Growth
Performance |
| Timeline |
| Franklin Adjustable |
| Capital World Growth |
Franklin Adjustable and Capital World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Capital World
The main advantage of trading using opposite Franklin Adjustable and Capital World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Capital World 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 Capital World will offset losses from the drop in Capital World'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 |
| Capital World vs. Qs Large Cap | Capital World vs. Fundamental Large Cap | Capital World vs. Qs Large Cap | Capital World vs. Touchstone Large 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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