Correlation Between Franklin Growth and Clearbridge Large
Can any of the company-specific risk be diversified away by investing in both Franklin Growth and Clearbridge Large 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 Clearbridge Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Growth Fund and Clearbridge Large Cap, you can compare the effects of market volatilities on Franklin Growth and Clearbridge Large 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 Clearbridge Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Growth and Clearbridge Large.
Diversification Opportunities for Franklin Growth and Clearbridge Large
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Clearbridge is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Growth Fund and Clearbridge Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Large Cap 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 Fund are associated (or correlated) with Clearbridge Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Large Cap has no effect on the direction of Franklin Growth i.e., Franklin Growth and Clearbridge Large go up and down completely randomly.
Pair Corralation between Franklin Growth and Clearbridge Large
Assuming the 90 days horizon Franklin Growth Fund is expected to generate 1.36 times more return on investment than Clearbridge Large. However, Franklin Growth is 1.36 times more volatile than Clearbridge Large Cap. It trades about 0.09 of its potential returns per unit of risk. Clearbridge Large Cap is currently generating about 0.07 per unit of risk. If you would invest 10,133 in Franklin Growth Fund on September 14, 2024 and sell it today you would earn a total of 4,968 from holding Franklin Growth Fund or generate 49.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Growth Fund vs. Clearbridge Large Cap
Performance |
| Timeline |
| Franklin Growth |
| Clearbridge Large Cap |
Franklin Growth and Clearbridge Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Growth and Clearbridge Large
The main advantage of trading using opposite Franklin Growth and Clearbridge Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Growth position performs unexpectedly, Clearbridge Large 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 Clearbridge Large will offset losses from the drop in Clearbridge Large's long position.| Franklin Growth vs. Allianzgi Convertible Income | Franklin Growth vs. Fidelity Sai Convertible | Franklin Growth vs. Lord Abbett Convertible | Franklin Growth vs. Putnam Convertible Incm Gwth |
| Clearbridge Large vs. Franklin Growth Fund | Clearbridge Large vs. Franklin Total Return | Clearbridge Large vs. Franklin Rising Dividends | Clearbridge Large vs. Franklin Mutual Shares |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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