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
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Pimco is 0.94. 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 is expected to generate 1.18 times less return on investment than Pimco New. But when comparing it to its historical volatility, Franklin New York is 1.21 times less risky than Pimco New. It trades about 0.21 of its potential returns per unit of risk. Pimco New York is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,081 in Pimco New York on September 2, 2024 and sell it today you would earn a total of 13.00 from holding Pimco New York or generate 1.2% 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. 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. Franklin High Yield | Franklin New vs. T Rowe Price | Franklin New vs. California High Yield Municipal | Franklin New vs. T Rowe Price |
| Pimco New vs. Multisector Bond Sma | Pimco New vs. Bbh Intermediate Municipal | Pimco New vs. T Rowe Price | Pimco New vs. Maryland Tax Free Bond |
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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