Correlation Between Franklin Convertible and Teton Convertible
Can any of the company-specific risk be diversified away by investing in both Franklin Convertible and Teton 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 Teton 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 Teton Vertible Securities, you can compare the effects of market volatilities on Franklin Convertible and Teton 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 Teton Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Convertible and Teton Convertible.
Diversification Opportunities for Franklin Convertible and Teton Convertible
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Teton is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Vertible Securities and Teton Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teton Vertible Securities 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 Teton Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teton Vertible Securities has no effect on the direction of Franklin Convertible i.e., Franklin Convertible and Teton Convertible go up and down completely randomly.
Pair Corralation between Franklin Convertible and Teton Convertible
Assuming the 90 days horizon Franklin Convertible is expected to generate 1.25 times less return on investment than Teton Convertible. But when comparing it to its historical volatility, Franklin Vertible Securities is 1.16 times less risky than Teton Convertible. It trades about 0.52 of its potential returns per unit of risk. Teton Vertible Securities is currently generating about 0.56 of returns per unit of risk over similar time horizon. If you would invest 1,241 in Teton Vertible Securities on August 31, 2024 and sell it today you would earn a total of 105.00 from holding Teton Vertible Securities or generate 8.46% 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. Teton Vertible Securities
Performance |
| Timeline |
| Franklin Convertible |
| Teton Vertible Securities |
Franklin Convertible and Teton Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Convertible and Teton Convertible
The main advantage of trading using opposite Franklin Convertible and Teton Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Convertible position performs unexpectedly, Teton 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 Teton Convertible will offset losses from the drop in Teton 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 |
| Teton Convertible vs. Teton Westwood Small | Teton Convertible vs. Teton Westwood Equity | Teton Convertible vs. Teton Westwood Mighty | Teton Convertible vs. State Street Institutional |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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