Correlation Between Franklin Convertible and Jpmorgan Smartretirement*
Can any of the company-specific risk be diversified away by investing in both Franklin Convertible and Jpmorgan Smartretirement* 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 Jpmorgan Smartretirement* 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 Jpmorgan Smartretirement Blend, you can compare the effects of market volatilities on Franklin Convertible and Jpmorgan Smartretirement* 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 Jpmorgan Smartretirement*. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Convertible and Jpmorgan Smartretirement*.
Diversification Opportunities for Franklin Convertible and Jpmorgan Smartretirement*
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Jpmorgan is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Vertible Securities and Jpmorgan Smartretirement Blend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Smartretirement* 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 Jpmorgan Smartretirement*. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Smartretirement* has no effect on the direction of Franklin Convertible i.e., Franklin Convertible and Jpmorgan Smartretirement* go up and down completely randomly.
Pair Corralation between Franklin Convertible and Jpmorgan Smartretirement*
Assuming the 90 days horizon Franklin Vertible Securities is expected to generate 0.84 times more return on investment than Jpmorgan Smartretirement*. However, Franklin Vertible Securities is 1.19 times less risky than Jpmorgan Smartretirement*. It trades about 0.15 of its potential returns per unit of risk. Jpmorgan Smartretirement Blend is currently generating about 0.08 per unit of risk. If you would invest 2,055 in Franklin Vertible Securities on August 25, 2024 and sell it today you would earn a total of 368.00 from holding Franklin Vertible Securities or generate 17.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Vertible Securities vs. Jpmorgan Smartretirement Blend
Performance |
| Timeline |
| Franklin Convertible |
| Jpmorgan Smartretirement* |
Franklin Convertible and Jpmorgan Smartretirement* Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Convertible and Jpmorgan Smartretirement*
The main advantage of trading using opposite Franklin Convertible and Jpmorgan Smartretirement* positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Convertible position performs unexpectedly, Jpmorgan Smartretirement* 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 Jpmorgan Smartretirement* will offset losses from the drop in Jpmorgan Smartretirement*'s long position.| Franklin Convertible vs. Franklin Strategic Income | Franklin Convertible vs. Franklin Rising Dividends | Franklin Convertible vs. Franklin Natural Resources | Franklin Convertible vs. Aquagold International |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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