Correlation Between Franklin Utilities and Spirit Of
Can any of the company-specific risk be diversified away by investing in both Franklin Utilities and Spirit Of 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 Utilities and Spirit Of into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Utilities and Spirit Of America, you can compare the effects of market volatilities on Franklin Utilities and Spirit Of 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 Utilities with a short position of Spirit Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Utilities and Spirit Of.
Diversification Opportunities for Franklin Utilities and Spirit Of
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Spirit is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Utilities and Spirit Of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirit Of America and Franklin Utilities 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 Utilities are associated (or correlated) with Spirit Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirit Of America has no effect on the direction of Franklin Utilities i.e., Franklin Utilities and Spirit Of go up and down completely randomly.
Pair Corralation between Franklin Utilities and Spirit Of
Assuming the 90 days horizon Franklin Utilities is expected to generate 1.19 times less return on investment than Spirit Of. In addition to that, Franklin Utilities is 1.1 times more volatile than Spirit Of America. It trades about 0.04 of its total potential returns per unit of risk. Spirit Of America is currently generating about 0.06 per unit of volatility. If you would invest 1,776 in Spirit Of America on September 2, 2024 and sell it today you would earn a total of 438.00 from holding Spirit Of America or generate 24.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 93.15% |
| Values | Daily Returns |
Franklin Utilities vs. Spirit Of America
Performance |
| Timeline |
| Franklin Utilities |
| Spirit Of America |
Franklin Utilities and Spirit Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Utilities and Spirit Of
The main advantage of trading using opposite Franklin Utilities and Spirit Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Utilities position performs unexpectedly, Spirit Of 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 Spirit Of will offset losses from the drop in Spirit Of's long position.| Franklin Utilities vs. Jhancock Disciplined Value | Franklin Utilities vs. Dunham Large Cap | Franklin Utilities vs. Fidelity Series 1000 | Franklin Utilities vs. Transamerica Large Cap |
| Spirit Of vs. Great West Goldman Sachs | Spirit Of vs. Gabelli Gold Fund | Spirit Of vs. Europac Gold Fund | Spirit Of vs. Short Precious Metals |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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