Correlation Between Franklin Convertible and Alger Health
Can any of the company-specific risk be diversified away by investing in both Franklin Convertible and Alger Health 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 Convertible and Alger Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Vertible Securities and Alger Health Sciences, you can compare the effects of market volatilities on Franklin Convertible and Alger Health 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 Convertible with a short position of Alger Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Convertible and Alger Health.
Diversification Opportunities for Franklin Convertible and Alger Health
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Alger is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Vertible Securities and Alger Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Health Sciences and Franklin Convertible 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 Vertible Securities are associated (or correlated) with Alger Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Health Sciences has no effect on the direction of Franklin Convertible i.e., Franklin Convertible and Alger Health go up and down completely randomly.
Pair Corralation between Franklin Convertible and Alger Health
Assuming the 90 days horizon Franklin Vertible Securities is expected to generate 0.64 times more return on investment than Alger Health. However, Franklin Vertible Securities is 1.57 times less risky than Alger Health. It trades about 0.4 of its potential returns per unit of risk. Alger Health Sciences is currently generating about 0.01 per unit of risk. If you would invest 2,178 in Franklin Vertible Securities on August 31, 2024 and sell it today you would earn a total of 277.00 from holding Franklin Vertible Securities or generate 12.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Vertible Securities vs. Alger Health Sciences
Performance |
| Timeline |
| Franklin Convertible |
| Alger Health Sciences |
Franklin Convertible and Alger Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Convertible and Alger Health
The main advantage of trading using opposite Franklin Convertible and Alger Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Convertible position performs unexpectedly, Alger Health 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 Alger Health will offset losses from the drop in Alger Health's long position.| Franklin Convertible vs. Franklin Equity Income | Franklin Convertible vs. Franklin Utilities Fund | Franklin Convertible vs. Franklin Rising Dividends | Franklin Convertible vs. Franklin Natural Resources |
| Alger Health vs. Versatile Bond Portfolio | Alger Health vs. Multisector Bond Sma | Alger Health vs. Calamos Short Term Bond | Alger Health vs. Ambrus Core Bond |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |