Correlation Between Franklin Adjustable and Inverse Nasdaq
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Inverse Nasdaq 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 Inverse Nasdaq 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 Inverse Nasdaq 100 Strategy, you can compare the effects of market volatilities on Franklin Adjustable and Inverse Nasdaq 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 Inverse Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Inverse Nasdaq.
Diversification Opportunities for Franklin Adjustable and Inverse Nasdaq
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Franklin and Inverse is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Inverse Nasdaq 100 Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inverse Nasdaq 100 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 Inverse Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inverse Nasdaq 100 has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Inverse Nasdaq go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Inverse Nasdaq
Assuming the 90 days horizon Franklin Adjustable Government is expected to generate 0.07 times more return on investment than Inverse Nasdaq. However, Franklin Adjustable Government is 13.36 times less risky than Inverse Nasdaq. It trades about 0.1 of its potential returns per unit of risk. Inverse Nasdaq 100 Strategy is currently generating about -0.05 per unit of risk. If you would invest 753.00 in Franklin Adjustable Government on September 13, 2024 and sell it today you would earn a total of 1.00 from holding Franklin Adjustable Government or generate 0.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Inverse Nasdaq 100 Strategy
Performance |
| Timeline |
| Franklin Adjustable |
| Inverse Nasdaq 100 |
Franklin Adjustable and Inverse Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Inverse Nasdaq
The main advantage of trading using opposite Franklin Adjustable and Inverse Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Inverse Nasdaq 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 Inverse Nasdaq will offset losses from the drop in Inverse Nasdaq'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 |
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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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