Correlation Between Franklin Adjustable and Value Fund
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Value Fund 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 Value Fund 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 Value Fund Value, you can compare the effects of market volatilities on Franklin Adjustable and Value Fund 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 Value Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Value Fund.
Diversification Opportunities for Franklin Adjustable and Value Fund
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Value is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Value Fund Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Fund Value 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 Value Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Fund Value has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Value Fund go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Value Fund
Assuming the 90 days horizon Franklin Adjustable is expected to generate 4.2 times less return on investment than Value Fund. But when comparing it to its historical volatility, Franklin Adjustable Government is 6.28 times less risky than Value Fund. It trades about 0.14 of its potential returns per unit of risk. Value Fund Value is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,605 in Value Fund Value on September 5, 2024 and sell it today you would earn a total of 632.00 from holding Value Fund Value or generate 39.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Value Fund Value
Performance |
| Timeline |
| Franklin Adjustable |
| Value Fund Value |
Franklin Adjustable and Value Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Value Fund
The main advantage of trading using opposite Franklin Adjustable and Value Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Value Fund 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 Value Fund will offset losses from the drop in Value Fund'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 |
| Value Fund vs. Balanced Fund Retail | Value Fund vs. Locorr Dynamic Equity | Value Fund vs. Sarofim Equity | Value Fund vs. The Hartford Equity |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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