Correlation Between Franklin Liberty and Pacer Pacific
Can any of the company-specific risk be diversified away by investing in both Franklin Liberty and Pacer Pacific 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 Liberty and Pacer Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Liberty Senior and Pacer Pacific Asset, you can compare the effects of market volatilities on Franklin Liberty and Pacer Pacific 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 Liberty with a short position of Pacer Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Liberty and Pacer Pacific.
Diversification Opportunities for Franklin Liberty and Pacer Pacific
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Franklin and Pacer is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Liberty Senior and Pacer Pacific Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Pacific Asset and Franklin Liberty 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 Liberty Senior are associated (or correlated) with Pacer Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Pacific Asset has no effect on the direction of Franklin Liberty i.e., Franklin Liberty and Pacer Pacific go up and down completely randomly.
Pair Corralation between Franklin Liberty and Pacer Pacific
Given the investment horizon of 90 days Franklin Liberty is expected to generate 2.15 times less return on investment than Pacer Pacific. In addition to that, Franklin Liberty is 1.1 times more volatile than Pacer Pacific Asset. It trades about 0.11 of its total potential returns per unit of risk. Pacer Pacific Asset is currently generating about 0.25 per unit of volatility. If you would invest 4,754 in Pacer Pacific Asset on November 18, 2024 and sell it today you would earn a total of 17.00 from holding Pacer Pacific Asset or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Liberty Senior vs. Pacer Pacific Asset
Performance |
| Timeline |
| Franklin Liberty Senior |
| Pacer Pacific Asset |
Franklin Liberty and Pacer Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Liberty and Pacer Pacific
The main advantage of trading using opposite Franklin Liberty and Pacer Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Liberty position performs unexpectedly, Pacer Pacific 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 Pacer Pacific will offset losses from the drop in Pacer Pacific's long position.| Franklin Liberty vs. Franklin Liberty High | Franklin Liberty vs. Pacer Pacific Asset | Franklin Liberty vs. First Trust Senior | Franklin Liberty vs. Franklin Liberty International |
| Pacer Pacific vs. Franklin Liberty Senior | Pacer Pacific vs. Franklin Liberty Short | Pacer Pacific vs. SPDR Bloomberg Investment | Pacer Pacific vs. VanEck Investment Grade |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |