Correlation Between Franklin New and New York
Can any of the company-specific risk be diversified away by investing in both Franklin New and New York 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 New and New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin New York and New York Municipal, you can compare the effects of market volatilities on Franklin New and New York 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 New with a short position of New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin New and New York.
Diversification Opportunities for Franklin New and New York
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and New is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Franklin New York and New York Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Municipal and Franklin New 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 New York are associated (or correlated) with New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Municipal has no effect on the direction of Franklin New i.e., Franklin New and New York go up and down completely randomly.
Pair Corralation between Franklin New and New York
Assuming the 90 days horizon Franklin New is expected to generate 1.79 times less return on investment than New York. But when comparing it to its historical volatility, Franklin New York is 1.26 times less risky than New York. It trades about 0.07 of its potential returns per unit of risk. New York Municipal is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,011 in New York Municipal on September 2, 2024 and sell it today you would earn a total of 83.00 from holding New York Municipal or generate 8.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin New York vs. New York Municipal
Performance |
| Timeline |
| Franklin New York |
| New York Municipal |
Franklin New and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin New and New York
The main advantage of trading using opposite Franklin New and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin New position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.| Franklin New vs. Franklin Mutual Beacon | Franklin New vs. Templeton Developing Markets | Franklin New vs. Franklin Mutual Global | Franklin New vs. Franklin Mutual Global |
| New York vs. Pimco High Yield | New York vs. Municipal Bond Fund | New York vs. Pimco Floating Income | New York vs. Investment Grade Porate |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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