Correlation Between Franklin New and Pimco New
Can any of the company-specific risk be diversified away by investing in both Franklin New and Pimco New 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 Pimco New 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 Pimco New York, you can compare the effects of market volatilities on Franklin New and Pimco New 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 Pimco New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin New and Pimco New.
Diversification Opportunities for Franklin New and Pimco New
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Pimco is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Franklin New York and Pimco New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco New York 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 Pimco New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco New York has no effect on the direction of Franklin New i.e., Franklin New and Pimco New go up and down completely randomly.
Pair Corralation between Franklin New and Pimco New
Assuming the 90 days horizon Franklin New York is expected to generate 0.77 times more return on investment than Pimco New. However, Franklin New York is 1.3 times less risky than Pimco New. It trades about -0.32 of its potential returns per unit of risk. Pimco New York is currently generating about -0.32 per unit of risk. If you would invest 1,091 in Franklin New York on October 9, 2024 and sell it today you would lose (13.00) from holding Franklin New York or give up 1.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin New York vs. Pimco New York
Performance |
| Timeline |
| Franklin New York |
| Pimco New York |
Franklin New and Pimco New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin New and Pimco New
The main advantage of trading using opposite Franklin New and Pimco New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin New position performs unexpectedly, Pimco New 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 Pimco New will offset losses from the drop in Pimco New's long position.| Franklin New vs. Icon Information Technology | Franklin New vs. Invesco Technology Fund | Franklin New vs. Technology Ultrasector Profund | Franklin New vs. Goldman Sachs Technology |
| Pimco New vs. Pimco Rae Worldwide | Pimco New vs. Pimco Rae Worldwide | Pimco New vs. Pimco Rae Worldwide | Pimco New vs. Pimco Rae Worldwide |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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