Correlation Between Franklin Adjustable and Wells Fargo
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Wells Fargo 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 Wells Fargo 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 Wells Fargo Endeavor, you can compare the effects of market volatilities on Franklin Adjustable and Wells Fargo 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 Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Wells Fargo.
Diversification Opportunities for Franklin Adjustable and Wells Fargo
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Wells is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Wells Fargo Endeavor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo Endeavor 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 Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo Endeavor has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Wells Fargo go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Wells Fargo
Assuming the 90 days horizon Franklin Adjustable is expected to generate 5.94 times less return on investment than Wells Fargo. But when comparing it to its historical volatility, Franklin Adjustable Government is 8.34 times less risky than Wells Fargo. It trades about 0.14 of its potential returns per unit of risk. Wells Fargo Endeavor is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 599.00 in Wells Fargo Endeavor on September 5, 2024 and sell it today you would earn a total of 280.00 from holding Wells Fargo Endeavor or generate 46.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.79% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Wells Fargo Endeavor
Performance |
| Timeline |
| Franklin Adjustable |
| Wells Fargo Endeavor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Franklin Adjustable and Wells Fargo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Wells Fargo
The main advantage of trading using opposite Franklin Adjustable and Wells Fargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Wells Fargo 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 Wells Fargo will offset losses from the drop in Wells Fargo'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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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