Correlation Between Franklin Convertible and Miller Convertible
Can any of the company-specific risk be diversified away by investing in both Franklin Convertible and Miller Convertible 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 Miller Convertible 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 Miller Vertible Bond, you can compare the effects of market volatilities on Franklin Convertible and Miller Convertible 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 Miller Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Convertible and Miller Convertible.
Diversification Opportunities for Franklin Convertible and Miller Convertible
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Miller is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Vertible Securities and Miller Vertible Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miller Vertible Bond 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 Miller Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miller Vertible Bond has no effect on the direction of Franklin Convertible i.e., Franklin Convertible and Miller Convertible go up and down completely randomly.
Pair Corralation between Franklin Convertible and Miller Convertible
Assuming the 90 days horizon Franklin Vertible Securities is expected to generate 1.79 times more return on investment than Miller Convertible. However, Franklin Convertible is 1.79 times more volatile than Miller Vertible Bond. It trades about 0.09 of its potential returns per unit of risk. Miller Vertible Bond is currently generating about 0.07 per unit of risk. If you would invest 2,283 in Franklin Vertible Securities on October 25, 2024 and sell it today you would earn a total of 83.00 from holding Franklin Vertible Securities or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Vertible Securities vs. Miller Vertible Bond
Performance |
| Timeline |
| Franklin Convertible |
| Miller Vertible Bond |
Franklin Convertible and Miller Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Convertible and Miller Convertible
The main advantage of trading using opposite Franklin Convertible and Miller Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Convertible position performs unexpectedly, Miller Convertible 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 Miller Convertible will offset losses from the drop in Miller Convertible'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 |
| Miller Convertible vs. Absolute Convertible Arbitrage | Miller Convertible vs. Rationalpier 88 Convertible | Miller Convertible vs. Fidelity Sai Convertible | Miller Convertible vs. Virtus Convertible |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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