Correlation Between Franklin Convertible and Mainstay Balanced
Can any of the company-specific risk be diversified away by investing in both Franklin Convertible and Mainstay Balanced 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 Mainstay Balanced 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 Mainstay Balanced Fund, you can compare the effects of market volatilities on Franklin Convertible and Mainstay Balanced 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 Mainstay Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Convertible and Mainstay Balanced.
Diversification Opportunities for Franklin Convertible and Mainstay Balanced
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Mainstay is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Vertible Securities and Mainstay Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Balanced 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 Mainstay Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Balanced has no effect on the direction of Franklin Convertible i.e., Franklin Convertible and Mainstay Balanced go up and down completely randomly.
Pair Corralation between Franklin Convertible and Mainstay Balanced
Assuming the 90 days horizon Franklin Convertible is expected to generate 1.01 times less return on investment than Mainstay Balanced. In addition to that, Franklin Convertible is 1.37 times more volatile than Mainstay Balanced Fund. It trades about 0.06 of its total potential returns per unit of risk. Mainstay Balanced Fund is currently generating about 0.08 per unit of volatility. If you would invest 2,749 in Mainstay Balanced Fund on August 30, 2024 and sell it today you would earn a total of 553.00 from holding Mainstay Balanced Fund or generate 20.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Vertible Securities vs. Mainstay Balanced Fund
Performance |
| Timeline |
| Franklin Convertible |
| Mainstay Balanced |
Franklin Convertible and Mainstay Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Convertible and Mainstay Balanced
The main advantage of trading using opposite Franklin Convertible and Mainstay Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Convertible position performs unexpectedly, Mainstay Balanced 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 Mainstay Balanced will offset losses from the drop in Mainstay Balanced's long position.| Franklin Convertible vs. Franklin Equity Income | Franklin Convertible vs. Franklin Utilities Fund | Franklin Convertible vs. Franklin Strategic Income | Franklin Convertible vs. Franklin Rising Dividends |
| Mainstay Balanced vs. Pace High Yield | Mainstay Balanced vs. Vanguard High Yield Tax Exempt | Mainstay Balanced vs. Strategic Allocation Aggressive | Mainstay Balanced vs. Ppm High Yield |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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