Correlation Between Franklin Growth and Franklin Efolio
Can any of the company-specific risk be diversified away by investing in both Franklin Growth and Franklin Efolio 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 Growth and Franklin Efolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Growth Opportunities and Franklin Efolio Allocation, you can compare the effects of market volatilities on Franklin Growth and Franklin Efolio 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 Growth with a short position of Franklin Efolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Growth and Franklin Efolio.
Diversification Opportunities for Franklin Growth and Franklin Efolio
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Franklin and Franklin is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Growth Opportunities and Franklin Efolio Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Efolio Allo and Franklin Growth 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 Growth Opportunities are associated (or correlated) with Franklin Efolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Efolio Allo has no effect on the direction of Franklin Growth i.e., Franklin Growth and Franklin Efolio go up and down completely randomly.
Pair Corralation between Franklin Growth and Franklin Efolio
Assuming the 90 days horizon Franklin Growth Opportunities is expected to under-perform the Franklin Efolio. In addition to that, Franklin Growth is 1.67 times more volatile than Franklin Efolio Allocation. It trades about -0.01 of its total potential returns per unit of risk. Franklin Efolio Allocation is currently generating about -0.01 per unit of volatility. If you would invest 2,465 in Franklin Efolio Allocation on September 12, 2024 and sell it today you would lose (5.00) from holding Franklin Efolio Allocation or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Growth Opportunities vs. Franklin Efolio Allocation
Performance |
| Timeline |
| Franklin Growth Oppo |
| Franklin Efolio Allo |
Franklin Growth and Franklin Efolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Growth and Franklin Efolio
The main advantage of trading using opposite Franklin Growth and Franklin Efolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Growth position performs unexpectedly, Franklin Efolio 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 Franklin Efolio will offset losses from the drop in Franklin Efolio's long position.| Franklin Growth vs. American Funds The | Franklin Growth vs. American Funds The | Franklin Growth vs. Growth Fund Of | Franklin Growth vs. Growth Fund Of |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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