Correlation Between Franklin California and Balanced Fund
Can any of the company-specific risk be diversified away by investing in both Franklin California and Balanced Fund 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 California and Balanced Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin California Tax Free and Balanced Fund Retail, you can compare the effects of market volatilities on Franklin California and Balanced Fund 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 California with a short position of Balanced Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin California and Balanced Fund.
Diversification Opportunities for Franklin California and Balanced Fund
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Balanced is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Franklin California Tax Free and Balanced Fund Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balanced Fund Retail and Franklin California 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 California Tax Free are associated (or correlated) with Balanced Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balanced Fund Retail has no effect on the direction of Franklin California i.e., Franklin California and Balanced Fund go up and down completely randomly.
Pair Corralation between Franklin California and Balanced Fund
Assuming the 90 days horizon Franklin California Tax Free is expected to generate 0.55 times more return on investment than Balanced Fund. However, Franklin California Tax Free is 1.81 times less risky than Balanced Fund. It trades about 0.14 of its potential returns per unit of risk. Balanced Fund Retail is currently generating about 0.07 per unit of risk. If you would invest 684.00 in Franklin California Tax Free on August 29, 2024 and sell it today you would earn a total of 7.00 from holding Franklin California Tax Free or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Franklin California Tax Free vs. Balanced Fund Retail
Performance |
| Timeline |
| Franklin California Tax |
| Balanced Fund Retail |
Franklin California and Balanced Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin California and Balanced Fund
The main advantage of trading using opposite Franklin California and Balanced Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin California position performs unexpectedly, Balanced Fund 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 Balanced Fund will offset losses from the drop in Balanced Fund's long position.| Franklin California vs. Angel Oak Financial | Franklin California vs. Artisan High Income | Franklin California vs. Blrc Sgy Mnp | Franklin California vs. Prudential Jennison Financial |
| Balanced Fund vs. All Asset Fund | Balanced Fund vs. HUMANA INC | Balanced Fund vs. Aquagold International | Balanced Fund vs. Barloworld Ltd ADR |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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