Correlation Between Franklin New and Us Government
Can any of the company-specific risk be diversified away by investing in both Franklin New and Us Government 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 Us Government 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 Us Government Securities, you can compare the effects of market volatilities on Franklin New and Us Government 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 Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin New and Us Government.
Diversification Opportunities for Franklin New and Us Government
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Franklin and UGSDX is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Franklin New York and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities 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 Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Franklin New i.e., Franklin New and Us Government go up and down completely randomly.
Pair Corralation between Franklin New and Us Government
Assuming the 90 days horizon Franklin New York is expected to generate 0.99 times more return on investment than Us Government. However, Franklin New York is 1.01 times less risky than Us Government. It trades about 0.52 of its potential returns per unit of risk. Us Government Securities is currently generating about 0.22 per unit of risk. If you would invest 1,073 in Franklin New York on September 13, 2024 and sell it today you would earn a total of 13.00 from holding Franklin New York or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin New York vs. Us Government Securities
Performance |
| Timeline |
| Franklin New York |
| Us Government Securities |
Franklin New and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin New and Us Government
The main advantage of trading using opposite Franklin New and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin New position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government's long position.| Franklin New vs. Us Government Securities | Franklin New vs. Davis Government Bond | Franklin New vs. Virtus Seix Government | Franklin New vs. Schwab Government Money |
| Us Government vs. Quantitative Longshort Equity | Us Government vs. Kentucky Tax Free Short To Medium | Us Government vs. Blackrock Short Term Inflat Protected | Us Government vs. Alpine Ultra Short |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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